China Green Finance Task Force Report: Green Insurance
The rapid and continuous increase of environmental incidents in China in recent years has led to severe impacts on its sustainable social and economic development and public health. This paper sets out the case for green insurance as a market-based risk management mechanism which could play a proactive role in preventing and transferring environmental pollution risks and offering loss compensation. Compulsory requirements for the purchase of pollution liability insurance would make future pollution costs explicit at the outset for high-risk projects. The paper recommends that China:
- Develop a national compulsory green insurance system and promulgate Regulations on the Compulsory Pollution Liability Insurance. Co
- Establish and improve relevant laws and regulations and enhance enforcement to build the rule of law as the basis of green insurance.
- Establish a professional risk evaluation mechanism and loss identification standards
- Create a corporate environmental credit rating database on the basis of a corporate environmental credit evaluation, so as to provide justification for determining premium rates and fiscal policy preferences for insured enterprises.
- Create a mechanism for coordination between green insurance and other financial services such as green credit.
Related Inquiry Publications
- China Green Finance Task Force Report: Lender Liability
- China Green Finance Task Force Report: International Experience
- Establishing China’s Green Financial System: Progress Report
- China Green Finance Task Force Report: Mandatory Disclosure
- China Green Finance Task Force Report: Green Investor Networks