China's southern province of Hainan has launched the first specially-designed insurance product to cover losses incurred by businesses as a result of the coronavirus outbreak in the country, the banking and insurance regulator said.
The scheme has set aside 200 million yuan ($28.7 million) to cover payouts, according to a notice released by the China Banking and Insurance Regulatory Commission (CBIRC) on Sunday. The Hainan government will subsidize 70% of the premium for the 100 key businesses designated eligible to take this insurance.
The six-month insurance, co-launched by 12 leading insurers including PICC, China Pacific Insurance Co, and Ping An Insurance Group, provides cover for production losses, wages paid to employees in quarantine and fees incurred due to the suspension of operations as a result of the epidemic, according to the notice.
The notice did not name the businesses or which sector they were engaged in.
“There are lingering concerns that the resumption of business operations will lead to more cases of coronavirus infection, and cause production to come to a standstill due to the quarantine policies,” according to the notice.
“The insurance will play its role of ‘social stabilizer’, and help companies to come through difficult times.”
China has grounded flights, cordoned off cities and suspended transport links over the past three weeks in a national effort to slow down the spread of the virus.
Many factories are yet to re-open, disrupting supply chains in China and beyond for everyone from smartphone makers to car manufacturers.
To counter mounting pressure on the economy, regulators have injected funds into the financial system to shore up market confidence. They have also begun speeding up the approval and launch of cheap life insurance products.
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