Compulsory traffic accident insurance open to foreign firms

Foreign insurance companies will be able to undertake the business of China's compulsory traffic accident liability insurance as of Tuesday, according to an amended regulation released Monday.

The State Council, China's Cabinet, has unveiled a decision to amend the Regulation on Compulsory Traffic Accident Liability Insurance for Motor Vehicles, which takes effect on Tuesday.

Under the previous regulation, "Chinese-funded insurance companies can undertake the compulsory traffic accident liability insurance business after approved by the China Insurance Regulatory Commission."

The amended version deleted the word "China-funded," indicating that all insurance companies will be allowed to undertake the compulsory insurance upon approval.

Analysts say that the green light will be beneficial for foreign insurers and increase their share in China's insurance market.

The regulation on compulsory traffic accident liability insurance has been in practice in China since 2006.