Insurance protection fund The insurance protection fund is different from the unexpired liability reserve and the outstanding claims reserve.

Unexpired liability reserves and outstanding claims reserves are liabilities of insurance institutions and are used for compensation under normal circumstances, while insurance protection funds belong to the capital of insurance organizations and are mainly used to cope with extremely large claims for huge disasters and accidents. They are only used for compensation in the current year.

It can only be used when business income and other reserves are insufficient to pay compensation.

In order to protect the interests of the insured and support the stable operation of insurance companies, insurance companies should, in accordance with the provisions of insurance laws, withdraw 0.8% of the company's premium income for the current year as an insurance protection fund.

Withdrawals from this fund can be stopped when the amount withdrawn from the fund reaches 10% of the insurance company's total assets.

The insurance protection fund should be withdrawn separately and stored in a special account at the People's Bank of China or a commercial bank designated by the People's Bank of China.

Insurance protection funds shall be managed centrally and used in a coordinated manner.