The new rules expand the scope of insurable risks for captives.
The legislative amendments on the group-wide supervision (GWS) framework and regulatory regime of insurance-linked securities (ILS) business has commenced in Hong Kong.
“The GWS framework is in full alignment with international standards and best practices, positioning Hong Kong as an ideal base for large insurance groups and a coordinator of supervisory efforts among all relevant jurisdictions in Asia Pacific,” said Clement Cheung, chief executive of the Insurance Authority (IA).
The amendments also seek to expand the scope of insurable risks for captives.
The IA has engaged closely with key industry stakeholders in developing the guideline on group supervision which spells out principles and standards for designated insurance holding companies on a wide range of areas including enterprise risk management, corporate governance, capital requirements and public disclosure.
The launch of this guideline will place the regulator in good stead to effect formal designation of the three related insurance groups by mid-2021.
On regulation of ILS business, the IA is ironing out implementation details based on reference from overseas experience while taking into account local circumstances. The Pilot ILS Grant Scheme will also provide added attraction to potential sponsors, with the first issuance expected within this year.
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