INSURANCE companies in Shanghai will have greater freedom to set car insurance rates from Thursday as the insurance regulator continues to reform the market.

The insurers will be able to price the rates on four factors — clients' claims records, violation of traffic rules, insurance companies' own risk assessment of the client, and the costs of selling the insurance policies through various channels, the Shanghai Bureau of the China Insurance Regulatory Commission said yesterday.

Insurers in Shanghai will be allowed to slash 40 percent off the standard rate if the policy holder has not claimed compensation in the past three years.