The Office of the Commissioner of Insurance (OIC) is working with the Hong Kong Federation of Insurers to design a fact statement, which all mainlanders who purchase insurance polices in Hong Kong must sign to ensure that they understand the differences between mainland Chinese and Hong Kong law and regulation.
This requirement is expected to be implemented in the middle of this year, according to a report in the South China Morning Post citing Insurance Commissioner John Leung Chi-yan.
“This would be similar to the warning of the CIRC. The mainlanders would need to understand the currency risks as well as the different regulations between Hong Kong and the mainland,” Mr Leung said.
He was referring to a warning issued by CIRC in April containing a litany of negatives about buying Hong Kong insurance policies. Apart from currency risk, these include interest rate risk, capital account risk, the lack of protection under mainland law and the high cost of seeking redress in Hong Kong if things went awry.
Hong Kong-based insurers are barred from selling their products on the mainland whose residents have to travel to Hong Kong to buy insurance in the territory.
Since February, Chinese regulators have moved to curb mainlanders’ purchases of insurance in Hong Kong, to stem the outflow of capital from the mainland. Mainlanders accounted for HK$31.6 billion, or 24.2% of the total new premiums of all life policies sold in Hong Kong last year.