The new rural cooperative medical system, which initiated in 2003, may develop as a new important business area for the insurance industry, reported China Insurance News on Wednesday, citing a market analyst.

Xiang Junbo, chairman of the China Insurance Regulatory Commission, recently inspected several regions where commercial insurance has successfully participated in the rural medical system, said China Insurance News.

The CIRC also issued a notice to encourage the commission of a qualified commercial insurance agency to handle medical insurance management services through governmental procurement methods.

Yang Jianhai, analyst of Essence Securities, said that China's insurance business has huge development potential in the field of health insurance, according to China Insurance News.

Regulators have attached importance to commercial insurances’ participation in the rural medical system. The aim is to use the new system to activate the health insurance market and promote a new area to contribute to premium income, Yang said.

Three insurance companies have entered the rural cooperative medical system, such as PICC Health Insurance Co Ltd, China Life Insurance (Group) Co, and China Pacific Insurance (Group) Co Ltd, CIRC and Ministry of Health said on April 19 at a news briefing.