Efforts are under way to amend the insurance law in order to improve risk response and ensure the healthy development of the booming insurance sector. 

A new amendment to the law, which has been revised four times since it took effect in 1995, was included in the annual legislative plan of the Standing Committee of the National People's Congress (NPC) in 2021. The People's Bank of China has since drafted a revision proposal, and the NPC's Financial and Economic Affairs Committee also suggested accelerating the amendment procedure.

A motion submitted to the fifth session of the 13th NPC this year reiterated the importance of amending the law in stimulating the vitality of the insurance market, improving protection for the insured, and enhancing the sector's contribution to real economy. It would also strengthen risk-based regulation, prevent and defuse financial risks, and maintain financial security, the motion noted.

The amendment should help improve the guarantee capacity of commercial insurance, be consistent with updated civil and commercial laws, and incorporate successful regulatory experience, thus providing a sound legal foundation for the innovation and high-quality development of the insurance industry, according to the motion.

The motion also suggested taking action to regulate players in the insurance business, enhance the protection of rights and interests of insurance consumers, and toughen penalties for violations.