Chinese airline insurance companies will be in fierce competition later this year when the China Insurance Regulatory Commission (CIRC) stops the industry's years of price fixing.
From December 1, 2007, airline insurance prices will be diversified from the current 20 yuan, a price that has remained unchanged for over four years, according to the CIRC. The 20-yuan mark was set in 2003 in an attempt to regulate the booming market.
The guideline, which was approved by the CIRC, will expire in December and insurance companies will then be able to diversify prices in line with their market strategies, the CIRC announced.
According to eastday.com's citation from an anonymous industrial insider, some companies have garnered huge profits from the monopolized market. The cost of an airline insurance product is estimated at about three yuan, while the insurance premium reaches 20 yuan, Beijing Youth Daily reported on September 23.
Despite the benefits for legitimate companies, the loosened regulations may open the door to fake products and illegal brokers. The CIRC suggests companies take appropriate measures to prevent such a market from emerging.
(China.org.cn by Wu Jin September 24, 2007)
