Insurance School, Central University of Finance and Economics, Beijing, China

1. “Protect Institution” or “Protect Elderly”?——An Discussion about the Choice of Risk Transfer Technology for Endowment Service Institutions HUANG Wanding ZHOU Yulian Insurance School, Central University of Finance and Economics, Beijing, China

2. The necessity and urgency Traditional ways of risk shifting The exploration of new ways Evaluation and Prospects 1 Contents 2 4 3 short Add your text in here Add your text in here Add your text in here Add your text in here

3. The necessity and urgency 1 “Protect Institution” or “Protect Elderly”

4. The necessity and urgency • Endowment services institutions have reaped rapidly development

5. 1. The necessity and urgency 1.1 Population forecast

6. 1. The necessity and urgency 1.2 Faced with the pressure of going concern • The particularity of institution’s business objects • The nature of the institution limits its capacity on the risk resistance

7. 1. The necessity and urgency 1.2 The particularity of their business object • The elders accidental injury risk • 1） high frequency, big damage • 2） hard to confirm casualty liability • 3） the institution often bear heavy moral burden, faced with the pressure of the public

8. 1. The necessity and urgency 1.2 The nature of the institution • Providers of the basic endowment insurance sponsored by the Government or the Society a. public welfare b. non-profitability

9. 2 Traditional ways of risk shifting “Protect Institution” or “Protect Elderly”

10. 2. Traditional ways of risk shifting 2.1 risk financing Introduction  insurance  non-insurance Retain  Transfer • hold-harmless agreements • hedging 2014/11/13 10

11. 2. Traditional ways of risk shifting 2.2 How does endowment services to transfer risk • The Unified model agreements (in China) • The Formatted hold-harmless contracts (in China)

12. 2. Traditional ways of risk shifting 2.2 a. The formatted hold-harmless contracts • “Contract Law" • Article 39, gives detail instructions: format terms should follow the principle of fairness • Article 52 and 53, list the various situations that made format terms invalided • Especially emphasized that involving personal injury goes against the principle of constitution

13. 2. Traditional ways of risk shifting 2.2 b. The unified model agreements • 2004, "the Tianjin pension agency agreement” which is the first one, holding by the provincial units. • Beijing and other cities are ready to follow. • Feasibility • the mandatory and scientific standards are hard to uniform. • model agreement cannot really transfer risks.

14. 3 The exploration of new ways “Protect Institution” or “Protect Elderly”

15. 3. The exploration of new ways 3.1 Insurance mechanism • A "government promotion, business operation, multi-party participation in” the endowment services risk sharing mechanism is gradually formed. • The representatives specific areas exploration situation of insurance approach can be found in the table below:

16. 3.2 Insurance ways Table 3

17. 3. The exploration of new ways 3.2 Insurance ways Table 4

18. 3. The exploration of new ways 3.2 Insurance ways Table 5

19. 3. The exploration of new ways 3.3 Characteristics • Operation mechanism implements "the government to promote" based on multivariate linkage • Insurance rules in more than a "united, beds, low premium" principle • Insurance liability mainly stay in the old man accident harm accident, at the same time are diversified.

20. Evaluation and prospects 4 “Protect Institution” or “Protect Elderly”

21. 4. Evaluation and prospects 4.1 From three aspects a. the basis of insurance technology - "liability insurance" or "accident insurance"? b. the key of insurance technology - "civil liability" or " insurance responsibility "? c. the design of insurance technology –"insured” and " claims”

22. 4. The exploration of new ways 4.2 a. the basis of "liability insurance" or "accident insurance"? • Two kinds of ambiguity: • Liability accident narrow the coverage • Accident liability extend the coverage • Based on the following two actual needs: • one kind of the organization management risk, in order to cover a wider range of operating risk • can avoid the trouble that agencies been blamed twice

23. 4. The exploration of new ways 4.2 b. the key - "civil liability" or "insurance responsibility"? • Objects of insured: the loss caused by the "institutions” unintentional tort or fault • The limitation of the Insurance liability • the broadness of the institutions • How to deal with this situation • shrink institutional responsibility • expand insurance liability

24. 4. The exploration of new ways 4.2 c. the design –"insured” and " claims” • From the Insured aspect: • Design the differential rate • Reform the rewards and punishments rate • From the underwriting aspect: • Agency liability insurance • the elder’s social medical insurance • other supplementary commercial insurance

25. Reference • Lin Xun. "insurance law" on translation anthology [M]. Taiwan: zhong hua press, 1991. • George E Rejda [M]. The risk management and insurance theory [M], ShenShuGuang main translation. Beijing: renmin university of China publishing Club, 2002. • Xu Feiqiong. "liability insurance" [M]. Beijing: China financial publishing house, 2007.

26. How to contect us • HUANG Wanding* • School of Management • Shanghai University of Engineering Science • No.333, Longteng Road, SongJiang District, Shanghai 201620 • Phone: (+86)15000580965 • Email: shbzhwd2010@126.com • ZHOU Yulian* • School of Insurance • Central University of Finance and Economics • No.39, South College Road, Haidian District, Beijing,100081 • Phone: (+86)18811455463 • Email: zhouyl607@126.com

27. THANKS!