Unreasonable requirements in some compulsory insurances should be reviewed or cancelled, said an industry regulatory official last week.

Compulsory insurance charges on railway passengers is irrational, said Yang Bohua, director of the Legal Affairs Department of the China Insurance Regulatory Commission at an insurance forum in Beijing.

Two percent of the price of a train ticket goes to railway accident compulsory insurance with claims limited to 20,000 yuan (US$2531). The practice has been implemented in accordance with the Regulations on Compulsory Accident Insurance for Railway Passengers since 1951.

With the economic development of the past five decades especially the last twenty years, medical expenses and fees for absences from work have increased greatly. Recently a person injured on the railway found that the 20,000-yuan accident coverage was not enough.

Meanwhile, it is unfair to offer the same coverage for potential accident victims as the insurance costs vary with each passenger.

For instance, the basic coach ticket, or a hard seat, sells for 389 yuan from Beijing to Lhasa, capital of Northwest China''s Tibet Autonomous Region, including 7.63 yuan charged for accident insurance, while a hard seat ticket from Beijing to the north port city of Tianjin costs 19 yuan including 0.37 yuan for accident insurance.

However, there have been no specifications about compulsory insurance and insurance charges on train tickets or expense receipts. Few passengers know that they''ve taken out insurance while buying train tickets, what the insurance coverage is and how to claim if there is an accident.

Consumers have the right to know about the goods and services they''ve paid for, in line with the Law of the People''s Republic of China on the Protection of Consumer Rights and Interests.

Doctor of law Huang Jinrong sued the Beijing Railway Bureau in August last year because he was not informed that he paid 3.98 yuan for compulsory insurance when he bought a ticket from Beijing to Yiwu, eastern Zhejiang Province, which sold for 203 yuan. He failed in the end, but the lawsuit sparked controversy and wide concern among people and relevant government bodies.

The insurance regulator responded to the case by saying that it never released any announcements that train passengers had to buy accident insurance and insurance companies like China Life Insurance Company and PICC Property and Casualty Company Limited, the country''s largest life and property insurer, did not underwrite accident insurance for train passengers through railway bureau train tickets.

The Insurance Law, which passed in 1995, stipulates that an applicant and an insurance provider shall enter into an insurance contract on a fair, voluntary and mutually beneficial basis through consultation and shall never infringe upon the public interest.

It also states that insurance companies and other entities shall never force others to enter into any insurance contract, except for those insurances made compulsory by laws and administrative regulations.

The Regulations on Compulsory Insurance for Rail Passengers, passed by a committee of the then State Council called the Government Administration Council in 1951, were not administrative regulations or national law, according to the Legislation Law of China.

The regulations should be revised or cancelled accordingly at least after the Insurance Law was promulgated in 1995 by the National People''s Congress, China''s top legislator, because national law has higher legal authority than administrative regulations and ministerial rules, under the Legislation Law, said He Hairen, a law office director in Beijing.

That passengers buy tickets and take the train means they sign a contract with the railway sector and the latter has the obligation to ensure passengers'' safety on the train, according to the Contract Law. Passengers don''t necessarily take out an accident insurance plan when they travel.

If the railway sector needs compulsory liability insurance, given the risk and influence of accidents occurring during rail transportation, the insurance should be paid by the sector, not its passengers as it is the direct and first beneficiary, analysts said.

In most western countries, vehicle carriers including railway and road transportation companies or units are required to have accident liability insurance.

China''s railways carried a record 1.18 billion passengers in 2004 with a ticket revenue of 59.29 billion yuan, according to statistics from the Ministry of Railways released on March 3, 2005.

In 2004, compulsory rail insurance premiums hit 1.19 billion yuan. The figure would be enormous if the premiums the railway sector collected in the past 55 years were added up.

Currently in China, air travellers and ship passengers buy accident insurance on a voluntary basis. There has been no compulsory air accident insurance for passengers in China since 1993, and no compulsory ship accident insurance since 2001.

China should rethink relevant stipulations on compulsory insurance. Meanwhile, the industry regulator should strengthen supervision in this regard, Yang said.

The Ministry of Railways is to set up a team to revise the regulations on compulsory rail insurance, total coverage in particular, passed in 1955 and the ministry has sent an informal invitation to Doctor Huang, according to a source familiar with the matter at the Beijing Railway Bureau. -China Daily