Operating mechanism and developing perspective of flood insurance bond

Since the moral hazard,the adverse selection and the credit hazard problems and so on,exist in traditional (re) insurance,it is difficult to disperse the flood hazard effectively Therefore,it is necessary to find an effectual financial tool to transfer the flood hazard to the capital market.On the basis of building the concept system of flood insurance bond,this article expatiates the differences between the general bond and traditional reinsurance bond.From the view of economics and actuarial science the price mechanism is delineated by analyzing flood insurance bond.By studying the operating mode of flood insurance bond,this article expounds the developmental perspective of flood insurance bond in China and points out that flood insurance bond provide us a new financial tool to control and reduce flood disasters.