The government of the Hong Kong Special Administrative Region has published in its gazette a proposed bill amending the Insurance Ordinance, which will be introduced into the Legislative Council for first reading on March 25.
According to the government’s announcement, the bill seeks to enhance the regulatory framework for the regulation and supervision of insurance groups, where a holding company for the group is incorporated in Hong Kong.
The International Association of Insurance Supervisors mandates all markets’ insurance regulators not just to regulate insurers on a ‘solo’ basis but also to cooperate and coordinate with each other to facilitate ‘group-wide’ regulation of insurance groups. Several other jurisdictions, such as the United Kingdom, Australia, Bermuda, and Singapore, have implemented group-wide regulation.
The bill will introduce measures to help Hong Kong come up with a clear and comprehensive regulatory regime for insurance groups. At present, the Insurance Authority does not have direct regulatory powers at the holding company level of these insurance groups, even if the holding company is incorporated in Hong Kong.
“The bill will help align Hong Kong’s insurance regulatory regime with international standards and practices, reinforce Hong Kong’s status as an international financial centre and establish Hong Kong as a preferred base for large insurance groups in Asia-Pacific,” said a spokesperson for the Financial Services and the Treasury Bureau. “Our target is to strive for early passage of the bill so as to highlight Hong Kong’s sustained efforts in enhancing its regulatory framework and competitiveness amid challenging times.”
Hong Kong-based insurers have shown their support for the bill’s passage.
“As a pan-Asian insurer headquartered in Hong Kong, FWD fully supports the passage of the bill which will further cement Hong Kong’s position as a leading life insurance hub with international practices and a number of other advantageous factors such as its maturity, development, dynamism and geographic proximity to China,” said FWD Group CEO Huynh Thanh Phong. “The genesis of FWD in Hong Kong serves as a pertinent example of the city’s wider pan-Asian opportunity to be a leading regional insurance hub.”
“We welcome the introduction of this legislation by the Hong Kong government. This will be a comprehensive, robust regulatory regime aligned with global best practice,” said Mike Wells, group chief executive of Prudential. “The new supervisory regime will reinforce Hong Kong’s position as a pre-eminent global financial centre, make the territory even more attractive as a hub for insurers with large regional and global operations, and cement HKIA’s role as a respected supervisor of international groups.”
