The Hong Kong Insurance Authority has welcomed the introduction of two insurance amendment bills to strengthen its risk management capabilities.
The first bill, the Insurance (Amendment) Bill 2020, provides a regulatory framework for ILS through the formation of SPIs.
Additionally, it seeks to expand the scope of insurable risks of captive insurers set up in Hong Kong, helping the industry capitalise on business opportunities arising from the belt and road initiative.
The second bill, the Insurance (Amendment) (No.2) Bill 2020, aims to consolidate a clear and firm legal basis for the Hong Kong Insurance Authority to exercise direct regulatory powers over the holding companies of multinational insurance groups.
The legislative framework would set out the basis upon which the Hong Kong Insurance Authority would perform effective and efficient group-wide supervision and ensure that the insurance regulatory system in Hong Kong will continue to be conducive to the maintenance of strong, well-capitalised, well-managed insurance groups.
The Hong Kong Insurance Authority has said it will maintain close dialogue with industry stakeholders on the details of the bills and will render its full support to the legislative council in the scrutiny process.
Moses Cheng, chairman of the Hong Kong Insurance Authority, said: “The central government has announced support for mainland insurers to issue catastrophe bonds in Hong Kong. The proposed legislative amendments will pave the way for Hong Kong to become the preferred domicile for ILS, in particular catastrophe bonds. This will facilitate insurers to better capture business opportunities, and more importantly, extend the capacity of the insurance industry; thus enhancing its sustainable development.”
“Using a principle-based, outcome-focused approach, the new framework will put Hong Kong on a par with international standards and practices, thus strengthening its competitiveness in the global insurance market and reinforcing its position as a regional insurance hub,” Cheng added.
