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1st insurance company for coal industry in pipeline

(Xinhua)
Updated: 2007-07-06 14:35

China is preparing to establish its first national-level insurance company for the coal industry in the coal-rich province of Shanxi.

China Coal Property and Casualty Company Ltd was approved by theChina Insurance Regulatory Commissionand the State Administration for Industry and Commerce in May this year, said Wang Shouzhen, director of the Shanxi Provincial Coal Industry Bureau, on Thursday.

The stock company, with a registered capital of 500 million yuan (US$65.8 million), was jointly proposed by 18 governmental departments and businesses, including the Shanxi Provincial Social Security Bureau for Coal Industry, the State-owned China National Coal Group Corp, and the Shanxi Coking Coal Group Co. Ltd, Wang told a preparatory meeting for the new company in the provincial capital of Taiyuan.

The Shanxi Provincial Social Security Bureau for Coal Industry, which is affiliated with the Shanxi Provincial Coal Industry Bureau, bought 20 percent of the new company's stocks for 100 million yuan, making it the largest shareholder, Wang said.

The role of the new company, to be headquartered in Taiyuan, will centre on "accident prevention, economic compensation, capital flow and safety supervision," Wang said.

Its businesses will include liability insurance, property insurance, short term health insurance, credit insurance, guaranteeing insurance and life insurance, he said.

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The establishment of the company is a natural requirement for the healthy and harmonious development of the coal industry, he said.

Coal mine accidents not only destroy miners' and their families' lives but also cause huge economic losses for coal mine businesses, he said.

"In addition, local governments always have to pay a lot for rescue and compensation because some mine bosses flee after accidents occur," Wang said.

Aside from that, the single insurance can no longer meet the higher-level and more diversified demands of miners and mine businesses in today's society, and the employer's liability insurance provided by a few commercial insurance companies is not adequate in terms of insurance coverage and economic returns, analysts said.

"The new company will combine the advantages of both the coal and insurance industries, which will not only enhance the coal industry's capability for resisting risks but also bring handsome profits for stockholders of the insurance company so as to promote the development of the insurance industry," said Jing Jinsheng, an expert with the Shanxi Provincial Insurance Regulatory Bureau.

China reported 2,945 coal mine accidents resulting in 4,746 fatalities last year, down 10.9 and 20.1 percent respectively from a year earlier, government statistics show.