The Bermuda Monetary Authority (BMA) has initiated legal proceedings in the Supreme Court of Bermuda under the Companies (Winding Up) jurisdiction concerning Tahoe Life Insurance Company Limited (Tahoe Life), citing Section 35 of the Insurance Act 1978 and the Companies Act 1981.
The primary role of the JPLs is to safeguard the interests of policyholders and maintain the company’s assets, rather than initiating a winding-up process.
Tahoe Life, a Class E insurer under the Insurance Act 1978, is authorised by the Hong Kong Insurance Authority (IA) to conduct life and annuity business in Hong Kong.
The JPLs’ appointment is a coordinated action with the IA, which appointed managers on the same date to oversee the company’s affairs and properties, ensuring protection for policyholders.
According to BMA, the company’s board of directors will remain intact despite the appointments of JPLs and managers. Both groups will collaborate with the board to prioritize policyholder protection.
The IA has welcomed the BMA’s coordinated regulatory measures concerning Tahoe Life.
An IA spokesperson highlighted the ongoing collaboration between the IA and BMA, aimed at ring-fencing the company’s assets to safeguard policyholder interests.
“Since Tahoe Life is incorporated in Bermuda, the IA has all along been coordinating with the BMA on any regulatory actions against Tahoe Life. The appointment of the JPLs serves to ring-fence the assets of (rather than to wind up) Tahoe Life for protection of the policyholders' interests,” the spokesperson for the IA said. “The IA welcomes the JPLs appointment in Bermuda, which operates in tandem with the work of the managers in Hong Kong, both seeking to ascertain Tahoe Life’s latest financial and solvency position and identify and execute effective and optimal recovery solutions for Tahoe Life.”
Both the IA and BMA are signatories to the International Association of Insurance Supervisors Multilateral Memorandum of Understanding on Cooperation and Information Exchange. This agreement has enabled close cooperation between the IA and BMA, exemplified by their joint regulatory actions in this case.
Separately, the Securities and Futures Commission (SFC) and the IA have been working together to address potential irregularities in Tahoe Life’s investment portfolio.
The IA’s appointment of managers on July 26, is the culmination of a four-year investigative process.
In May 2020, the IA sought the SFC’s assistance regarding certain investments made by Tahoe Life. SFC inspections revealed that the company’s assets were connected to financial instruments linked to a related party in Mainland China. Following a joint operation in June 2021, the SFC took disciplinary action against a licensed fund manager.
SFC CEO Julia Leung emphasised the joint efforts to maintain market integrity and ensure compliance in Hong Kong’s financial sector.
“This united effort highlights our shared dedication to upholding the integrity of Hong Kong’s financial markets by ensuring no misconduct putting investors in harm’s way falls through the cracks between different regulators,” she said. “As close partners, the SFC and the IA will continue to work closely to ensure resilience, accountability, and trust are firmly embedded in the financial sector.”
IA CEO Clement Cheung acknowledged the SFC’s support, underscoring the importance of their Memorandum of Understanding in protecting policyholders and upholding Hong Kong’s status as an international financial centre.
“The IA expresses deep appreciation to the SFC for providing valuable support during an investigation on related party transactions entered into by Tahoe Life. This bears testimony to the efficacy of the MoU in protecting the interest of policyholders and the image of Hong Kong as an international financial centre,” he said.
