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Part One Introduction The establishment of People’s Insurance Company of China (PICC) in 1949 highlights the start of China’s insurance development. Especially after implementing the reform policy, the insurance business has been advancing by leaps and bounds. Before 1988, the country’s insurance market was entirely occupied by PICC. But, after that, Ping An Insurance Company of China was set up in Shenzhen, Guangdong, followed by the Tai Ping Life Insurance Co. Ltd. founded in Shanghai in 1991. “Wu Xiaoping, Vice-President of China Insurance Regulatory Commission, stated at the Finance forum of the 1st China International Service Conference that since the foreign insurance companies entered Chinese market, the insurance companies in China has increased from 6 to 61, among which 24 are Chinese companies and 37 are foreign ones. The total assets of foreign insurance companies in China rise from RMB 4.4 billion in 1999 to RMB 19.78 billion in 2003.” [1] (P13) At present, 15 cities are open to foreign insurance companies, which facilitate famous insurance companies around the world to set up over 200 offices in China, like AIA (American International Insurance). Therefore, China’s present insurance market is primarily regarded as a market with fierce competitions where domestic insurance companies take the leading place competing with foreign companies. From 1980 to 2004, the average speed of insurance development was up to 37%, much higher than that of national economy development. Up to the end of October 2004, the total assets of China's insurance industry have already amounted to 1.1 trillion. PICC, Tai Ping Insurance Company of China and Ping An Insurance Company of China became the biggest integrated insurance group companies. According to the annual statistics taken by the International Credit Grade Organization, on the biggest insurance companies in the world published in Standard＆Poor, PICC ranks the 17th. All this shows that domestic insurance companies have gained certain power to compete with foreign companies. However, “China’s insurance, started far later than overseas market is still at the incipient stage. The crucial indicator of the insurance industry is lower than the world average level, and the transformation rate of insurance sources is relatively low. The insurance depth of China is 3.33% and the insurance intensity is RMB287.4 Yuan, compared with 8.06%, the average insurance depth, and US$469.6 (about RMB3887.1 Yuan) of the insurance intensity in the world in 2003.” [2] (P75) So, China’s insurance industry still has great potential to be fully developed. China’s access to WTO requires China to further open its insurance market. In the short term, it will bring intense pressure to Chinese insurers and it was an arduous task to enhance their strength to meet the challenges from their overseas counterparts. But in the long run, opening China’s insurance market is the demand of domestic insurance development rather than simply a duty to bear. In a sense, China’s demand to open its market to the outside world is actually greater than the responsibility it wants to shoulder. The challenges coexist with opportunities. Foreign companies must bring a big impact to our companies in many fields, such as products, innovation, service, technology. But they also provide opportunities for an overall development. The coming sharp competition will be a war for professionals. Foreign companies give domestic insurers a sense of urg