The China Insurance Regulatory Commission (CIRC) yesterday launched an interim rule on the compulsory vehicle liability insurance, adjusting the floating premium rates to show greater fairness.

The rule, an updated version of the draft measures released on June 15, will be put into practice on Sunday.

Compared with the draft measure, the new rule undoes the link between the premium rate and the breach of traffic rules. The rate is now only related to traffic accidents.

"The loosening doesn't mean a breach of traffic rules should not be connected with the premium rate. Rather, there are only seven cities with the shared information system between insurance companies and local traffic management bureaux, so it is difficult to put into practice," Yuan Li, a CIRC spokesman said.

The setting up of a shared information system across the country was a primary task in promoting the compulsory vehicle liability insurance.

Shanghai, which introduced floating premium rates on a trial basis, reported a 65.96-percent decrease in traffic accidents and a 9.27-percent decrease in traffic deaths for 2005.

The success is largely attributed to the shared information system between the Shanghai Insurance Institution and the Shanghai traffic management bureau, Yuan said.

Meanwhile, the new rule also adjusts the range of the floating rate according to the severity and frequency of accidents in which drivers are involved.

Those who are accident-free for three years could enjoy a 30-percent discount on their next premium, up from 20 percent in the draft measures.

Also, the punishment for having an accident is lesser with the new rule. Those who have two or more accidents in a year will have to pay a premium rate of 110 percent, down from 115 percent.

"The change shows the rule's focus on prevention through encouragement," Yuan said.

The changes have also been made in response to a number of criticisms of the draft measure when it was made public.

CIRC received 482 complaints via e-mail and seven via fax in five days following the announcement.

A number of people said the range for the floating premium rate was unreasonable and would increase the financial burden on drivers.