A Study of the Deficit of the Third Party Liability Compulsory Insurance of Motor Vehicle

Abstract

With the rapid development of the popularization of motor vehicles and legal system construction, our daily lives become more convenient. But traffic accidents also have brought pain and heavy economic burden to the public. As the first compulsory insurance in China, the third party liability insurance aims at protect the injured in traffic accident sufficiently. In the recent years, however, the loss of the third party liability compulsory insurance of motor vehicle has aroused the concern of the whole society. Combining with our actual situation, this paper studies this insurance system in order to help to find out the deep causes of losses. Making a profit instead of suffering a loss has an important impact on the health of the insurance companies and the financial industry. Compared to the commercial insurance, the third party liability insurance of motor vehicle needs more improvement. According to the existing data and the foreign insurance operation experience, the paper analyzes the third party liability compulsory insurance of motor vehicle practicality through the comparative analysis. There are three parts to the causal analysis of the operating loss: insurance fraud, premium rate evaluation mechanism and the business model. At last, the paper gives some reasonable suggestions to make the compulsory motor vehicle liability insurance act better.