SHANGHAI (Reuters) - China will strengthen supervision of its insurance industry over the next three to five years to guarantee the ability of insurers to pay compensation, the official China Securities Journal reported on Monday.
New mechanisms will strengthen insurers' capital adequacy supervision, risk management and information disclosure to ensure they retain good financial condition and can pay claims on time, the newspaper said.
While details are still being discussed, the targets were clearly stated in a document issued recently by the China Insurance Regulatory Commision, it said.
The document "has made it clear that China will use three to five years to build up new supervisory mechanisms on insurers' compensatory capability", the newspaper said.
China has one of the world's fastest-growing major insurance markets, with its total insurance premiums jumping 10 percent to 1.43 trillion yuan ($227 billion) in 2011 from a year earlier.
But China's insurance supervisory mechanisms are still in a fledging stage, with the country only gradually abolishing its cradle-to-grave welfare systems under planned economic reforms over the past three decades. ($1=6.3 Yuan)
(Reporting by Lu Jianxin and Carrie Ho; Editing by Paul Tait)