And the main factors that hinder the realization of effective supervision are:absence of effective supervision,unreasonableness of supervision system and imperfection of lawsystem.

This paper first briefly reviews the main contents of effective supervision regulations of old age.

The Research on Investor Protection and the Regulatory Efficiency of Securities Based on the Law and Finance Theory;

From the aspects of Western micro-economics and social welfare economics, the connotation of insurance development refers to the improvement of market entities quality, enhancement of market efficiency, improvement of the quality of transactions and improvement of regulatory efficiency.

The paper firstly sets up various variables for regulation efficiency and mainly studies the regulation efficiency of independent director and institutional investor that are two new participants in the corporate governance of Chinese capital market.

But the insurance regulation polices in China are emulating methods and experience of developed countries to a large degree, lack of close association with local economics, culture and mentality, which lead high indirect cost, especially unobvious opportunity cost, and low regulation efficiency.