Hong Kong: Insurers move closer to implementation of RBC regime
Source: Asia Insurance Review | May 2023
The Insurance (Amendment) Bill 2023 has been gazetted, a move which takes the insurance industry closer to a legislative framework to implement a risk-based capital (RBC) regime. The bill will be introduced into the legislative council for first reading on 19 April.
The Insurance Authority (IA) says that it welcomes the introduction of the bill. The IA will maintain close communication with the insurance industry on the details of the bill and render full support to the legislative council in the scrutiny process.
The bill proposes amendments to capital requirements, valuation of assets and liabilities, requirements on submission and disclosure of information, etc, in relation to the RBC regime, as well as empowers the IA to prescribe the detailed requirements by way of subsidiary legislation.
The RBC regime requires insurers to maintain capital that is commensurate with the risks they bear. In formulating the new regime, the IA has observed three overarching principles: compliance with relevant Insurance Core Principles issued by the International Association of Insurance Supervisors; meeting needs and ensuring the competitiveness of the insurance industry; and strengthening the resilience of the insurance industry for the protection of policyholders. A