The National Financial Regulatory Administration (NFRA) and the Ministry of Finance (MOF) have released the Circular on Expanding the Coverage of Catastrophe Insurance for Urban and Rural Residential Houses and Further Improving Catastrophe Insurance System (the "Circular").
The Circular mainly involves the following three aspects. (1) Expanding the liability for catastrophe insurance: with urban and rural residential buildings and indoor ancillary facilities being the protection target, the insurance liability will be expanded to include natural disasters such as typhoons and floods in addition to existing destructive earthquakes. (2) Increasing the basic insurance amount: the basic insurance amount will be increased from CNY50,000 for each urban residential house and CNY20,000 for each rural residential house to CNY100,000 and CNY40,000. Each household may, upon considering the market value of the house, negotiate with the insurance company to determine the insurance amount. The maximum amount shall not exceed CNY1 million per household. The insurance company may provide supplementary commercial insurance for the portion exceeding CNY1 million. (3) Supporting the development of commercial catastrophe insurance: for insurance liabilities and protection targets beyond the existing coverage, the China Urban and Rural Residential Housing Catastrophe Insurance Community may provide supplementary commercial insurance with the approval of the general meeting of its members.