particular, many families in the affected areas were reduced to poverty because they had no insurance and were left to rely on the government and society at large to help them, Chen said.

Limited interest

While farmers have welcomed the CIRC's insurance program, major insurance providers have not yet made a decision about whether they will participate. Representatives from China Ping An, China Life Insurance (Group) Co. and American International Assurance Co. Ltd. told Beijing Review that they are still conducting research on insurance for rural residents and are not ready to provide such products at present. At the same time, they also emphasized that the rural insurance market has always been a target market for development.

The CIRC has taken into consideration the possible participation of big insurance companies and stresses that the entire society needs to support the program because of the challenges involved, said Chen. To encourage more companies to participate, the CIRC has reduced or dropped its insurance supervision charges to reduce operating costs for insurance companies. It also has relaxed limitations on sales channels and sales qualifications to encourage innovative business patterns and reduce costs for training salespersons. Holding to the principle of appropriate competition, the CIRC will provide proper protection for the insurance companies that participate in the pilot program, with the aim of strengthening their confidence for long-term operations in rural markets. The commission also encourages insurers to link policy sales to other businesses that provide services for farmers to reduce management costs.

"Of course, the long-term sustainable development of microinsurance for health needs to mobilize the enthusiasm of insurance companies, sales personnel and low-income farmers," Chen said.

But not all the insurance companies that want to offer rural microinsurance services can get the CIRC's support. According to a commission circular issued on June 23, the institutions have to meet several requirements to participate in the pilot program. First, the headquarters of the insurance companies should attach great importance to developing such insurance and have a clear strategy and financial arrangement for it. Second, the insurance companies should have establishments that can provide sales and services in areas at and under the county level in the nine pilot provinces. Third, they should keep separate accounts for rural microinsurance clients. Fourth, company branches in selected areas should provide organizational, personnel and financial guarantees during the program's trial run.