Urban residents in Tibet are now covered by a serious illness insurance, the local government said Saturday.

Residents with medical insurance records will be covered by the new insurance, and the local government will cover the premiums, said Ma Quanping, head of the insurance regulatory bureau of Tibet Autonomous Region.

The regional government paid more than 10 million yuan (1.5 million U.S. dollars) to insure 294,000 people in 2015, Ma added.

The insurance will cover 70 percent to 90 percent of medical bills that exceed 5,000 yuan. It has been designed to alleviate the financial burden that accompanies serious illness like cancer, heart attacks or strokes, he said.

The insurance is managed by the Tibetan branch of the People's Insurance Company of China (PICC). In April, Tibet adopted a policy to promote the development of its budding insurance sector.