The State Environment Protection Administration (SEPA) is cooperating with the China Insurance Regulatory Commission (CIRC) to promote compulsory liability insurance in the coal exploitation industry as a pilot and to promote the same in other industries after gaining experience in the coal explotation business. 

SEPA's Department of Policies, Laws and Regulations deputy director Bie Tao said China will vigorously develop liability insurance, including environment pollution liability insurance, through market operation, policy guidance, government promotion and lawmaking.

China needs to establish an environmental liability insurance system and set up a stable pollution losses compensation mechanism, to attempt to change the current situation of the government being charged with vast losses for each pollution accident.