"Keeping Watch Over China's Business Risk and Insurance"
Vol. 2 , No. 3 - July 26, 2001
TOPICS THIS ISSUE:
CHINESE NEWS
- Internet Helps Reform Insurance Industry
- Insurance Helps Maritime Safety
INTERNATIONAL NEWS
- Poor Nations To Gain Free Access To Biomedical Research
- NAMIC Urges State Legislators To Introduce The Insurance Compliance Self-Evaluative Privilege Model Act
IT'S YOUR HEALTH
- Incresing TB Danger
- Consulting Malaria
FINANCE AND INVESTMENT
- How An Overseas Career Can Impact Your Social Security Retirement Benefits
- Adoption of the PRC Trust Law
NAVIGATING CHINA
- Polar Routes
- The Opening of the West
- Need to Make a Phone Call???
EyeWatchina is intended to be used for news purposes only. It should not be taken as comprehensive advice, and its producers will not be held responsible for any such reliance on its contents. EyeWatchina, Copyright 2001 WaterStreet Asia in cooperation with Lehman, Lee & Xu, All Rights Reserved.
CHINESE NEWS
Internet Helps Reform Insurance Industry
The Internet wave, which is sweeping the world, will dramatically help reform the old business model of China's insurance industry. Internet usage in the insurance business will greatly reduce the costs of insurance companies and improve transaction efficiency, "China Daily" quoted John Roglieri, vice-chief executive of the E-commerce department of the world's largest insurance group, AXA's US company, as saying. "In particular, the policy management cost will drop by 98 percent," he said. Meanwhile, the infrastructure for developing on-line insurance services will also mature as China's Internet technology makes bigger strides and the number of Internet users grows dramatically. The Ping'an Insurance Company of China, the country's largest shareholding insurer, last month launched its website company, which provides money matter management services, on-line banking, and on-line insurance to Internet customers. Another major shareholding insurance company in China, the Taikang Life Insurance Co. Ltd, last week also unveiled its website offering on-line insurance information and insurance e-commerce. Although immediate effect has not been shown, insurers are upbeat about the future. "with the increasing number of Internet customers, we are optimistic about the prospect of on-line insurance," said Liang Tao, an official with the Beijing office of China's insurance industry watchdog, China Insurance Regulatory Commission. However, experts and officials at home and abroad admit that e-commerce can not totally replace traditional insurance transaction methods.
Source: People's Daily
Insurance Helps Maritime Safety
China's shipping industry should adopt a compulsory liability insurance system to alleviate environmental damage and property and human loss in the face of an increasing number of marine accidents, said an official with the State Maritime Safety Administration.
Speaking at the first China International Shipping Technology and Equipment Exhibition held at the northern port city of Tianjin last week, deputy director of the administration Liu Dehong said a law should be drafted to force ship owners, especially smaller shipping companies, to buy third party liability insurance. In this way, even if the ship owner cannot afford to compensate for losses caused by an accident, the victim, the third party, can still get reimbursement from an insurance company.
Moreover, passengers should be required to buy life insurance when boarding a boat or ship, said Liu.
This kind of compulsory insurance system could help avoid financial trouble and embarrassment following marine accidents that claim large numbers of lives or oil spill accidents which pollute the environment, he said.
After 20 years of development, following the start of reform and opening-up policies, China has established a fleet of about 360,000 vessels, totalling 50 million tons. The seventh largest fleet in the world is cruising in the country's 18,000 kilometres of coastal line and 110,000 kilometres of rivers.
As the traffic increases on China's waterways, the number of accidents has also increased.
Statistics indicate that in the last 10 years, 14,900 marine accidents have occurred in China, in which 3,107 vessels and 6,084 lives were lost, a loss totalling 1.9 billion yuan (US$230 million)
Source: sinoprojects.com, July 16, 2001
INTERNATIONAL NEWS
Poor Nations To Gain Free Access To Biomedical Research
The World Health Organization (WHO) and six publishing companies said on Monday they would provide the latest biomedical research via the Internet to thousands of scientists and researchers in the developing world.
Almost 1,000 leading medical and scientific journals and eventually textbooks will be available online for free or at reduced prices to medical schools and research institutions in nearly 100 countries.
"The initiative is tremendously important and exciting," Dr Gro Harlem Brundtland, director-general of the WHO, told a news conference in London. "It will enable many thousands of doctors, health workers and researchers to access information that is very important."
The initiative follows similar moves by pharmaceutical companies to improve access and reduce prices of life-saving drugs in poor countries. It is part of a wider United Nations-led incentive to bridge the health gap between wealthy and poor nations.
Many doctors and scientists in the developing world have little access to medical journals, which until now were sold for the same price throughout the world. Annual subscriptions range from hundreds of dollars to more than $1,000 a year.
"Nearly 100 developing countries will gain access to vital scientific information they could otherwise not afford," Brundtland added.
Dr Richard Smith, editor of the British Medical Journal, described the initiative as having the potential to transform the medical environment in developing nations from a desert into a garden.
The project is due to be up and running in the beginning of 2002 and expected to last for at least three years while its progress is monitored.
Anglo-Dutch publishing group Reed Elsevier, the U.S. Harcourt Worldwide STM Group, American health care publisher Lippincott Williams & Wilkins, Germany's Springer Verlag, John Wiley & Sons Inc of the United States and Britain's Oxford-based Blackwell Sciences Ltd will work with the British Medical Journal and the Open Society Institute of the George Soros foundation network on the project.
All the publishers said the journals will be free online in the poorest countries and at reduced prices, which are still to be set, in lower-income nations.
None of the publishers or the Soros Foundation, which will assist with the project, could say how much it will cost.
Source: Reuters July 9
NAMIC Urges State Legislators To Introduce The Insurance Compliance Self-Evaluative Privilege Model Act
The National Association of Mutual Insurance Companies (NAMIC) urged the National Conference of Insurance Legislators (NCOIL) to introduce its Insurance Compliance Self-Evaluative Privilege Model Act in state legislatures next year.
The act assures the confidentiality of internal audit reports voluntarily turned over by companies. NAMIC Market Regulation Manager David B. Reddick wrote NCOIL as part of a public hearing on Market Conduct Examinations scheduled tomorrow in Chicago.
At the most recent National Association of Insurance Commissioners national meeting, the Self-Critical Analysis Working Group decided to limit its work to developing a "set of principles" for states to follow in deciding on a self-critical analysis privilege.
A strong proponent for reforming the insurance market conduct examination process, NAMIC urged that legislators move away from"routine" market conduct exams and to focus their attention on "targeted" exams that attempt to uncover the most problematic company behaviors.
The NAIC Uniformity Working Group was created and charged it with developing a set of "best practices" for market conduct examinations. A number of the Working Group's recommendations incorporate the 12-point plan for improving the market conduct examination process that NAMIC and the three other national property/casualty trade associations developed and made available to the NAIC last August.
The Working Group intends to finalize its work product by September and to encourage states to voluntarily adopt the standards it is creating. NAMIC believes the Insurance Legislators Foundation and, more broadly, the members of NCOIL can play a vital role in this issue by encouraging their insurance regulators to adopt the Working Group's standards. This will help to ensure more uniformity among the states on how market conduct examinations are performed in the future.
Source:Yahoo News, July 11, 2001
IT'S YOUR HEALTH
INCREASING TB DANGER
The Chinese government and the World Health Organization (WHO) are to step up efforts to curb tuberculosis (TB) in China, where millions of people are being infected every year, officials said. According to official statistics, China has the second highest number of TB patients in the world, next only to India.
The government has earmarked a special fund of U. S. $4.8 million this year to prevent and control TB, especially in western provinces and other poverty stricken areas, according to Chen Xianyi, deputy director at the Ministry of Health.
Source:China Daily, 2001 June 5
Consulting Malaria
A 45-year old consultant was admitted to a local clinic in a southeast Asian country with high fever and nausea. He was found to have malaria and was treated with IV fluids and medications. However, the fever did not subside and he became more lethargic. Both the treating doctor and the medical assistance advisor felt nothing further could be done at the local hospital and recommended urgent evacuation to a hospital in Bangkok. There, in addition to malaria, he was found to have pulmonary and hemoglobic complications. Tropical disease specialists treated the patient. Once he was released, the medical assistance provider made flight arrangements for the patient and his wife to return to their home in New Zealand .
Re-printed with permission from The Odyssey Volume 12
FINANCE AND INVESTMENT
How An Overseas Career Can Impact Your Social Security Retirement Benifits
The tradeoffs between career opportunities in different countries and government-sponsored retirement benefits are difficult to assess. If your career involves several non-U.S. employers and takes you to multiple countries, you could pay social security taxes to several countries but still never receive any government sponsored retirement benefits.
For the full article, go here:
http://overseasdigest.com/odsamples/social22.html
http://www.fawco.org/notices/socialsecurity.html
By Barbara Frew, author of Personal Finance for Overseas American
Adoption of the PRC Trust Law
On April 28, 2001, NPC China promulgated PRC Trust Law which will come into effect on October 1 this year.
The newly adopted Trust Law was enacted to adjust trust relationship, regulate trust acts, protect the legitimate rights and interests of parties to trust and promote the healthy development of trust business in China. The Law, in seven chapters, governs the set up of trust, trust property, parties to trust, trust change and termination, public welfare trust and more. First of all, the Law defines a trust as "an act that a settlor, based on his faith in a trustee, hands over the title or ownership of his property to the said trustee, and the latter, in his own name and according to the wish of the settlor, manages or disposes of the property for the benefit of the beneficiary or for a specific purpose". Then it spells out relatively detailed stipulations of the requirements of the creation of a trust, such as the purpose of a trust, definition of trust assets and so on. At last, in chapter IV of the law, it specifies the requirements for setting up charitable trusts.
The Trust Law is a product of the development of China economy. With the increasing need of the public investment and rationalization of the management of properties in China, people have found that it becomes more and more necessary to enact law and regulations to regulate the activities of trusts. Though the law did not directly provide regulations on management, operation and legal responsibilities of Trust companies, foundations, and investment companies, it certainly can be considered as the first step in the development of a legal system governing trust business. Since the practice of trusts is not fully developed in China right now, the Trust law failed to provide detailed provisions on several aspects of trust activities. These Regulations are most likely to be supplemented by administrative regulations and court interpretations. According to Professor Jiang Ping, a well-known expert on Civil Law and Corporation law, the basis of the Trust Law and the enactment of future investment fund law is underway.
By Joanna Zhang, Lehman, Lee & Xu
NAVIGATING CHINA
Polar Routes
The Russian Government has announced that it will open more of its airspace to flights between North America and Asia passing over the North Pole. This will decrease the time of some flights by over an hour. Flights between Beijing/Shanghai/Hong Kong and New York/Chicago/San Francisco/Los Angeles will be affected.
Source: CAAC News
The Opening of the West
As part of the effort to increase the speed of the economic development of China's West, flights are going to be increased between the East and the West. An example of this is Xinjiang Airlines announcement that it will soon be offering Red Eye flights between Urumqi and Beijing/Shanghai/Guangzhou. The price of these nightime flights is also expected to be less than half of the normal fare.
In addition direct flights are beginning Between Hong Kong and Urumqi.
Source: CAAC News
Need to Make a Phone Call???
China's recent laws against using mobile phones on airplanes are being enforced. In several recent incidents, passengers who have been warned against using their mobiles and have continued to use them have been arrested.
Source: CAAC News
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