China to open third-party auto insurance market to foreign firms

Edited and Translated by People's Daily Online

The news that China has decided to allow foreign companies to compete in the market for compulsory third-party liability automobile insurance has shocked the industry.

Compulsory third-party liability automobile insurance is the first compulsive insurance system implemented in accordance with national laws.

“In China, compulsive auto insurance bears more social management functions,” said Tao Cunwen, professor with Insurance School of Central University of Finance, the insurance not only helps victims of traffic accidents obtain timely and efficient compensation and medical treatment, but helps reduce economic burdens of the persons causing traffic accidents.

According to experts, apart from buying compulsive insurance in accordance with national mandatory regulations, automobile owners will also buy some necessary commercial insurance, such as car caustic danger, robbery and theft insurance, insurance for persons on board etc.