The Chinese Insurance Regulatory Commission and Finance Ministry jointly issued a catastrophe home insurance plan on Monday.
According to the plan, 45 insurance companies have joined the program which will issue special insurance products providing post-earthquake compensation, especially focusing on residential homes.
The statement says in the first phase, the basic insurance coverage will be 50 thousand yuan for urban dwellers and 20 thousand yuan for rural ones.
The catastrophe insurance system is designed to ease the burden on the government and public finances.
A special insurance reserve fund supported by the finance ministry will be set up.
The document also notes that the legislation process for the plan will be sped up.
In China, post-disaster reconstruction is mostly financed by the state, or through public and private donations, while in the West, insurance has proven effective in dealing with the aftermath of such calamities, accounting for 30 to 40 percent of the loss.
For more on this, CRI's Niu Honglin earlier spoke with Liu Zhiqin, Senior Fellow of Chongyang Institute for Financial Studies, Renmin University of China.
