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TABLE OF CONTENTS CHAPTER I GENERAL PROVISIONS CHAPTER II PURCHASE OF THE INSURANCE CHAPTER III COMPENSATION CHAPTER IV PENALTIES CHAPTER V SUPPLEMENTARY PROVISIONS CHAPTER I GENERAL PROVISIONS Article 1. The present Regulation is formulated in accordance with the Road Traffic Safety Law of the People's Republic of China and the Insurance Law of the People's Republic of China for the purpose of ensuring that the victims in road motor vehicle traffic accidents may be compensated, and promoting road traffic safety. Article 2. The owners or managers of the motor vehicles driving on the roads within the People's Republic of China shall purchase compulsory traffic accident liability insurance for motor vehicles (hereinafter referred to the "compulsory motor vehicle liability insurance") in accordance with the provisions of the Road Traffic Safety Law of the People's Republic of China. The present Regulation shall be applicable to the purchase and compensation of compulsory motor vehicle liability insurance, and the supervision and administration thereof. Article 3. The compulsory motor vehicle liability insurance mentioned in the present Regulation shall refer to the compulsory liability insurance of an insurance company, which gives compensation within the limit of liability to the victims other than the personnel of the motor vehicles and the insured for their bodily injuries and death and property losses arising from the road traffic accidents caused by the insured motor vehicles. Article 4. The insurance regulatory institution of the State Council (hereinafter referred to the CIRC) shall conduct supervision and administration on the business of compulsory motor vehicle liability insurance of the insurance companies. The traffic control department of the public security organs and the competent department of agriculture (farm machinery) (hereinafter called uniformly the administrative departments of motor vehicles) shall make supervision and inspection on motor vehicles for their purchase of compulsory motor vehicle liability insurance. The administrative department of motor vehicles will not register those motor vehicles if they are discovered without compulsory motor vehicle liability insurance, and the motor vehicle safety technical inspection organs shall not make inspection on them. The traffic control department of the public security organs and the traffic policemen shall, when making investigation and handling illegal acts of road traffic safety and road traffic accidents, check the insurance marks of the compulsory motor vehicle liability insurance. CHAPTER II PURCHASE OF THE INSURANCE Article 5. The Chinese-funded insurance companies (hereinafter referred to the insurance companies) may, upon the approval of the CIRC, undertake the business of compulsory motor vehicle liability insurance. In order to ensure the implementation of the system of compulsory motor vehicle liability insurance, the CIRC shall have the power to request the insurance companies to undertake the business of compulsory motor vehicle liability insurance. No entity or individual may undertake compulsory motor vehicle liability insurance without the approval of CIRC. Article 6. The compulsory motor vehicle liability insurance shall apply uniform insurance clauses and a base premium rate. The CIRC shall make examination and approval on the premium rates in light of the principle of "no profit, no loss" in general for the business of compulsory motor vehicle liability insurance. When CIRC makes examination and approval on premium rates, it may engage the relevant professional institutions to make assessment, and may hold hearings to solicit the public opinions. Article 7. An insurance company shall manage its business of compulsory motor vehicle liability insurance and other insurance businesses separately, and make business accounting on them independently. The CIRC shall check the business of compulsory motor vehicle liability insurance of the insurance companies, and announce the result to the society. The CIRC may request or allow the insurance companies to adjust the premium rates accordingly on the basis of the overall profit-making or losses of the business of compulsory motor vehicle liability insurance. In case there is any major adjustment on the premium rates, the CIRC shall hold hearings. Article 8. In case an insured motor vehicle has no illegal act of road traffic accidents or road traffic accident, the insurance company shall reduce its premium rate in the next year. If, in the following years, the insured motor vehicle still has no illegal act of road traffic accidents or road traffic accident, the insurance company shall continue reducing its premium rate, till to the minimum standards. If the insured motor vehicle has any illegal act of road traffic accidents or road traffic accident, the insurance company shall raise its premium rate in the next year. If the illegal acts of road traffic accidents or road traffic accidents occur for many times, or any grave road traffic accident occurs, the insurance company shall raise its coverage of the premium rate. If the insured has no fault in road traffic accidents, the premium rate shall not be raised. The standards for reducing or raising the premium rate shall be formulated by the CIRC jointly with the public security department of the State Council. Article 9. The CIRC, the public security department of the State Council, the competent department of agriculture of the State Council, and other relevant departments shall establish, step by step, the system of sharing the information on relevant compulsory motor vehicle liability insurance, illegal acts of road traffic accidents and road traffic accidents. Article 10. A policyholder shall choose an insurance company that has the qualification of undertaking the business of compulsory motor vehicle liability insurance when purchasing the insurance, and the insurance company chosen by it shall not refuse to undertake or delay undertaking the insurance. The CIRC shall make announcement to the society on the insurance companies that have the qualification for undertaking the business of compulsory motor vehicle liability insurance. Article 11. A policyholder shall, when purchasing the insurance, inform the insurance company of the important matters according to the facts. The important matters shall include: the type of the motor vehicle, factory brand and model, identification number, number of the license, quality for the use of the vehicle, and the names (titles) of the owners or managers of the vehicles, sex, age, resident place, number of identity card or driving license (organization code), information on the occurrence of accidents involved in the motor vehicle before the renewal, and other matters prescribed by the CIRC. Article 12. When a policyholder signs the contract of compulsory motor vehicle liability insurance, it shall pay all the insurance premiums at one lump sum; the insurance company shall issue insurance policy to the policyholder, and the insurance mark. The insurance policy and the insurance mark shall be indicated with the number of the insurance policy, number of the plate, insurance term, name and address of the insurance company, and the telephone number for handling compensation. The insured shall place the insurance mark onto the insured motor vehicle. The design of the insurance marks shall be uniform countrywide. The insurance policy and the insurance marks shall be made under the supervision of the CIRC. No entity or individual may forge, alter or use forged or altered insurance policies or insurance marks. Article 13. When concluding the contract of compulsory motor vehicle liability insurance, a policyholder shall not request an insurance company to affix other conditions outside the insurance clauses and the premium rate. When concluding the contract of compulsory motor vehicle liability insurance, an insurance company shall not force the policyholder to sign a commercial insurance contract or request to annex other conditions. Article 14. An insurance company shall not rescind the contract of compulsory motor vehicle liability insurance, unless the policyholder fails to perform the obligation of informing the important matters according to the facts. If a policyholder fails to perform the obligations of informing the important matters according to the facts, the insurance company shall notify the policyholder before rescinding the contract, and the policyholder shall perform the obligation of informing the important matters according to the facts within 5 days from the day of receiving the notice; if the policyholder has performed the obligation of informing the important matters according to the facts, the insurance company shall not rescind the contract. Article 15. An insurance company shall, when rescinding the contract of compulsory motor vehicle liability insurance, take back the insurance policy and the insurance mark, and notify the administration departments of motor vehicles. Article 16. The policyholders shall not rescind the contract of compulsory motor vehicle liability insurance, except there is one of the following circumstances: (1) The insured motor vehicle is canceled of registration according to law; (2) The insured motor vehicle has gone through the formalities for stopping driving; or (3) The insured motor vehicle is proved lost by the public security organs. Article 17. Before an insurance company rescinds the contract of compulsory motor vehicle liability insurance, it shall undertake insurance liabilities according to the contract. When the contract is rescinded, an insurance company may collect the insurance premiums from the day when the insurance liability begins till the day the contract is rescinded, and the remaining insurance premiums shall be returned to the policyholder. Article 18. In case the property right of the insured motor vehicle is transferred, the owner of the motor vehicle shall go through the formalities for alteration of the contract of compulsory motor vehicle liability insurance. Article 19. At the expiry of the contract of compulsory motor vehicle liability insurance, a policyholder shall renew the insurance in a timely manner, and provide the insurance policy of the previous year. Article 20. The insurance term of the compulsory motor vehicle liability insurance shall be one year, if there is any of the following circumstances, a policyholder may purchase a short-term compulsory motor vehicle liability insurance: (1) An overseas motor vehicle enters the territory of China temporarily; (2) A motor vehicle drives on the road temporarily; (3) There is less than one year for a motor vehicle to be discarded; or (4) Other circumstances prescribed by the CIRC. CHAPTER III COMPENSATION Article 21. In case the insured motor vehicle occurs any road traffic accident, which results in bodily injury or death or property loss of any victim other than the personnel of the motor vehicle itself or the insured, the insurance company shall give it compensation within the scope of limit of liability for compulsory motor vehicle liability insurance. If the damage of a road traffic accident is caused by a victim on purpose, the insurance company shall not give compensation to him. Article 22. If there is any of the following circumstances, the insurance company shall pay rescue fees first within the scope of limit of liability for the compulsory motor vehicle liability insurance, and shall be entitled to request the person causing the injury to pay such fees afterwards: (1) The driver fails to obtain the qualification for driving or drives under the influence of alcohol; (2) The insured motor vehicle causes the accident during the period when it is stolen or robbed; or (3) The insured creates road traffic accidents purposely. In case there is any of the aforesaid circumstances, which results in the occurrence of any road traffic accident, and results in the property loss of any victim, the insurance company shall not undertake compensation liabilities. Article 23. A unified limit of liability shall be implemented on the compulsory motor vehicle liability insurance countrywide. The limit of liability shall include limit of compensation for death, injury, and disability, limit of compensation for medical expenses, limit of compensation for property losses, and limit of compensation for the insured if he has no liability in a road traffic accident. The limit of liability for compulsory motor vehicle liability insurance shall be prescribed by the CIRC along with the public security department of the State Council, competent department of health of the State Council, and the competent department of agriculture of the State Council. Article 24. The state establishes social relief funds for road traffic accidents (hereinafter referred to the relief funds). In case there is any of the following circumstances, the funeral expenses for bodily injuries and death of the victims in road traffic accidents, and part of or all of the rescue expenses shall be paid first from the relief funds, and the relief fund management institutions shall have the right to request the persons who are liable for the road traffic accidents to pay such expenses afterwards: (1) The rescue expenses exceed the limit of liability for compulsory motor vehicle liability insurance; (2) The motor vehicles that have caused the accidents have not taken part in the compulsory motor vehicle liability insurance; or (3) The drivers of the motor vehicles escape after causing the accidents. Article 25. The relief funds shall be sourced from: (1) The capital withdrawn on the basis of a certain proportion of insurance premiums for the compulsory motor vehicle liability insurance; (2) Fines imposed upon the owners or the managers of the motor vehicles that do not purchase the compulsory motor vehicle liability insurance according to the provisions; (3) The capital demanded afterwards by the relief fund management institutions from the persons liable for the road traffic accidents; (4) Interests of relief funds; and (5) Other capital. Article 26. The concrete measures for the management of relief funds shall be formulated for trial implementation by the finance department of the State Council together with the CIRC, public security department of the State Council, competent department of health of the State Council, and the competent department of agriculture of the State Council. Article 27. In case the insured motor vehicle occurs any road traffic accident, and the insured or the victims notify the insurance company, the insurance company shall give a reply immediately, and inform the insured or the victims of the concrete compensation procedures and other relevant matters. Article 28. In case any insured motor vehicle occurs a road traffic accident, the insured shall apply to the insurance company for the payment of the insurance money. The insurance company shall, within one day from the day of receiving the application for compensation, notify the insured in writing to provide the insurance company with the relevant certificates and materials in respect of the compensation. Article 29. An insurance company shall, within 5 days from the day of receiving the certificates and materials provided by the insured, make verification on whether an accident falls within the insurance liability, and notify the insured of the results; if it does not fall within the insurance liabilities, it shall explain the reasons in writing; if it falls within the insurance liabilities, it shall pay the insurance money within 10 days after concluding an agreement on payment of insurance money. Article 30. If the insured and an insurance company has any dispute over the compensation, they may apply for arbitration or bring a lawsuit to the people's court. Article 31. An insurance company may pay insurance money to the insured, or to the victims directly. But, if there is necessity for the insurance company to pay or pay in advance rescue expenses due to the rescue of the injured, the insurance company shall, after receiving the notice of the traffic control department of the public security organs, pay or pay in advance rescue expenses to the medical institutions in a timely manner after verification. Where there is necessity for a relief fund management institution to pay rescue expenses first due to the rescue of the injured, the relief fund management institution shall, after receiving the notice of the traffic control department of the public security organs, pay or pay in advance rescue expenses to the medical institutions in a timely manner after verification. Article 32. The medical institutions shall rescue and treat the personnel injured in road traffic accidents by referring to the relevant clinical diagnosis directories formulated by the competent department of health of the State Council. Article 33. If an insurance company or a relief fund management institution needs to verify the relevant information to the relevant departments or medical institutions when the insurance company pays insurance money or pays rescue expenses in advance, or the relief fund management institution pays rescue expenses in advance, the relevant departments or medical institutions shall give cooperation. Article 34. The staff members of an insurance company or a relief fund management institution shall keep secrets the personal privacy of the parties. Article 35. The provisions of the relevant laws shall be followed for the items and standard for compensation to road traffic accidents. CHAPTER IV PENALTIES Article 36. In case anyone illegally undertakes the business of compulsory motor vehicle liability insurance without CIRC's approval, the CIRC shall ban it. If a crime is constituted, it shall be subject to criminal liabilities. If it is not serious enough to constitute a crime, the CIRC shall confiscate its illegal gains, or impose upon it a fine of one time up to five times the illegal gains, if the illegal gains are more than 200,000 yuan. If there is no illegal gain or the illegal gains are less than 200,000 yuan, it shall be given a fine ranging from 200,000 to 1,000,000 yuan. Article 37. In case any insurance company undertakes the business of compulsory motor vehicle liability insurance without CIRC's approval, the CIRC shall order it to correct, order it to return the insurance premiums collected, and confiscate the illegal gains, if the illegal gains are more than 100,000 yuan, it shall be given a fine of one time up to five times the illegal gains; if there is no illegal gain or the illegal gains are less than 100,000 yuan, it shall be given a fine ranging from 100,000 to 500,000 yuan. If it does not correct within the time limit or results in serious consequences, it shall be ordered to stop business operation or be suspended of the license for operation of insurance business. Article 38. In case an insurance company violates the provisions of the present Regulation and has any of the following acts, the CIRC shall order it to correct, impose upon it a fine ranging from 50,000 to 300,000 yuan. If the circumstance is serious, its business scope may be restricted, or it may be ordered to stop accepting new businesses or be suspended of the license for operation of insurance business: (1) Refusing to undertake or delaying undertaking the compulsory motor vehicle liability insurance; (2) Failing to undertake compulsory motor vehicle liability insurance in accordance with the uniform insurance clauses or base premium rate; (3) Failing to manage the business of compulsory motor vehicle liability insurance and other insurance businesses separately, and failing to make business accounting on them independently; (4) Forcing the policyholders to conclude commercial insurance contract; (5) Rescinding the contract of compulsory motor vehicle liability insurance in violation of regulations; (6) Refusing to perform the agreed-upon obligations of paying insurance money; or (7) Failing to pay or pay in advance the rescue expenses required in a timely manner. Article 39. In case any owner or manager of a motor vehicle fails to purchase the compulsory motor vehicle liability insurance required, the traffic control department of the public security organs shall detain the motor vehicle, and notify the owner or manager of the motor vehicle to purchase the insurance required, and impose a fine two times the insurance premiums payable for the minimum limit of liability required. In case the owner or manager of a motor vehicle has purchased the compulsory motor vehicle liability insurance required, the traffic control department of the public security organs shall return the motor vehicle to him in a timely fashion. Article 40. In case the insurance mark fails to be placed on any motor vehicle driving on roads, the traffic control department of the public security organs shall detain the motor vehicle, notify the party to provide the insurance mark or make up the corresponding formalities, and may give the party a warning or a fine ranging from 20 to 200 yuan. If the party has provided the insurance mark or made up the corresponding formalities, the traffic control department of the public security organs shall return the motor vehicle in a timely fashion. Article 41. In case anyone forges, alters, or uses forged or altered insurance mark, or uses the insurance mark of other motor vehicles, the traffic control department of the public security organs shall collect it, detain the motor vehicle, and impose a fine ranging from 200 to 2,000 yuan. If a crime is constituted, the criminal liabilities shall be investigated for. If the parties have provided the corresponding legal certificates or made up corresponding formalities, the traffic control department of the public security organs shall return the motor vehicle in a timely manner. CHAPTER V SUPPLEMENTARY PROVISIONS Article 42. The following terms in the present Regulation shall have the following meanings: (1) Policyholder shall refer to the owner or manager of a motor vehicle, who concludes the contract of compulsory motor vehicle liability insurance and has the obligation to pay insurance premiums according to the contract; (2) The insured shall refer to the policyholders and the lawful drivers allowed by them; (3) Rescue expenses shall refer to the medical expenses occurred to the medical institutions for taking necessary treating measures by referring to the relevant clinical diagnosis directories formulated by the competent department of health of the State Council at the time of occurrence of road traffic accidents, which result in bodily injuries to the personnel whose vital signs are imbalanced or whose vital signs are balanced but who would otherwise have danger of death if such measures are not taken, or would result in disability or organ dysfunction or result in obvious extension of the illness. Article 43. The present Regulation shall be applied by analogy for the compensation to bodily injuries and death or property losses arising from the accidents caused by motor vehicles when driving along other places outside the roads. Article 44. The measures for the in-service motor vehicles of the Chinese People's Liberation Army and the Chinese People's Armed Police Forces to take part in the compulsory motor vehicle liability insurance shall be prescribed by the Chinese People's Liberation Army and the Chinese People's Armed Police Forces separately. Article 45. The owners and managers of motor vehicles shall purchase compulsory motor vehicle liability insurance within 3 months from the day when the present Regulation is implemented. If anyone has purchased the third party liability insurance for commercial motor vehicles, it shall purchase the compulsory motor vehicle liability insurance at the expiry of the insurance term. Article 46. The present Regulation shall come into force as of July 1, 2006. |
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