Abstract The authors use data in 2007~2012 from 37 home insurance companies and adopts the method of measurement of generalized moment estimation, construct all kinds of risk indicators under the second generation compensation system, and use the panel data investigates the pro-cyclical effect of the insurance industry and countercyclical regulatory effects on hold capital insurance enterprise. Results show that the regulatory system in their generation, the insurance industry’s multiplier expand effect and reinsurance effect lead to the pro-cyclical effect, and under the system of compensation of the second generation of the regulatory system the influences are not identical, while underwriting risk increase will improve insurance companies hold capital amount, the investment risk and default risk increase will reduce the amount of insurance enterprises hold capital. In response to the risk of pro-cyclical effect, the insurance company’s core tier one capital anchoring mechanism should be established.
2016, Vol. 33 
