Asian News - New rules for Taiwanese insurers setting up branches in HK, Macau
Source: Asia Insurance Review | Jul 2015
Taiwanese insurance organisations, which plan to establish subsidiaries or branches in Hong Kong or Macau, will have to meet investment limits for these territories, the Financial Supervisory Commission (FSC) announced in June.
The regulatory agency said that this is part of its new rules for Taiwanese insurance organisations operating in the two territories, which was amended following a review. It added that the regulations were last updated in 2000, around 15 years ago.
The FSC said that the new rules allow not only insurance companies but also auxiliary insurance entities to set up branch offices or subsidiaries in Hong Kong and Macau. A subsidiary is defined as a company in which the Taiwanese insurance organisation holds a stake of more than 50% whether directly or indirectly.
Other conditions for setting up branches or subsidiaries in the Special Administrative Region (SAR) are that the Taiwanese insurance institutions must have a risk-based capital (RBC) ratio of above 250%, and not have been penalised by the regulatory authorities in the most recent three years of operation. In addition, the insurance organisations must also have a good risk management and internal control track record. The operating capital and capital of the Taiwanese insurance organisations is not to exceed 40% of net worth.
In March this year, the FSC gave its approval to Fubon Life to set up a subsidiary in Hong Kong. No Taiwanese insurance organisation had applied for approval to set up operations in the SARs as of 2 June, the regulator said.