China has one of the fastest growing insurance markets in the world. The number of professional insurance lawyers cannot meet the demand in the market due to the limited history of both the legal and insurance industry within China.
In comparison with other financial fields, such as banking, finance, and securities, the quality and quantity of legal services in the insurance market is woefully insufficient.
Thirty years ago China People’s Insurance Company had a monopoly on the market as it was the only insurer in China. In addition to offering insurance services, the company also retained a small amount of governmental regulatory authority. During this time, Chinese insurance lawyers had no real role in the insurance market. With the opening up of the insurance market and the urgent demand for professional legal services, the Chinese legal profession needs to remedy this human capital deficit.
The first step is for lawyers to become more familiar with the insurance industry. Very few Chinese lawyers have any relevant experience in this field. When an insurance companies speaks with a lawyer who’s knowledge of the applicable laws is only equivalent to that of the company, the company loses confidence in having the lawyer act on its behalf.
Secondly, insurance law is very specific. There are numerous principles, rules, doctrines and unique terminology. Daunted by the complexity, many lawyers do not have the desire to put forth the time and effort to gain expertise in this field.
Thirdly, compared with security and banking law, insurance law attracts little interest from lawyers. In the past many legal professionals have focused on the opportunities available in the securities market and innovative banking sector.
In reality, however, the Chinese insurance market possesses a wealth of opportunity for lawyers. Potential foreign investors are frequently visiting the CIRC asking for the names of Chinese partners to establish a Joint Venture Company in order to promote their insurance product. Insured parties are looking for assistance in ensuring that they have indemnity from their insurer and gaining clarification about complex insurance contracts. Insurance companies need help in complying with all of the regulations which are constantly being put out by the CIRC. It is clear that this industry is in need of more professional insurance lawyers.