Hong Kong IA welcomes regularisation of preferential treatment from China
This deal between the two countries started in 2018.
Hong Kong’s Insurance Authority (IA) has welcomed the China Banking and Insurance Regulatory Commission (CBIRC) to include the preferential treatment for Hong Kong insurance industry as an integral part of the Solvency Regulatory Rules II for Insurance Companies.
The preferential treatment allows for lower capital requirements for China mainland insurers when they cede businesses to eligible Hong Kong professional reinsurers. Additionally, the rules prescribe the capital requirement for Mainland insurance institutions issuing catastrophe bonds in Hong Kong.
According to the IA, since its introduction in 2018 through the China Risk Oriented Solvency System (C-ROSS), the deal between the two countries has been operating smoothly.
The CBIRC said that these measures have implemented the expansion of the national opening-up policy and strengthened the mutual trust in supervisory work between the Mainland and Hong Kong, which are conducive to better risk management of the industry and enhancing stable development for both markets.
Meanwhile the IA pointed out that the decision of CBIRC fully reflects the importance of Hong Kong’s position as a global risk management centre under the “dual circulation” economic strategy and its contribution to facilitating the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt and Road Initiative.
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