General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
August 13, 2018

IA of Hong Kong issued templates and technical specifications for the second quantitative impact study (QIS 2) on the development of risk-based capital (RBC) regime. Additionally, IA released a package of template and technical specifications on matching adjustment for insurers conducting long-term business. Authorized insurers have been requested to participate in the QIS 2 and submit the completed template(s) by November 30, 2018.

IA released two different packages for QIS 2—one for insurers carrying on long-term business and the other for insurers carrying on general business. Composite insurers should use both packages in respect of long-term and general business. Each package contains a template collecting quantitative and qualitative data, technical specifications for the completion of the corresponding template, annex on discount rates, and a question and answer template. IA also finalized the package of template and technical specifications on matching adjustment for insurers carrying on long-term business. IA aims to collect sufficient and relevant data from the matching adjustment package to further analyze and formulate a set of eligible criteria in applying matching adjustment as well as to determine the adjusted spread methodology. Matching adjustment is an alternative discounting approach that reflects the assets held by individual companies based on their policies for asset and liability management.

QIS 2 is important and will offer a holistic view of the solvency position of individual insurers and the insurance industry. This would form a basis for IA to move forward to the next step of moderation exercise and to perform further testing in the third QIS. While developing the RBC regime, IA is mindful of the overarching objectives, including alignment with international standards and practices, resilience of the insurance industry for the protection of policyholders, and maintaining competitiveness of the Hong Kong insurance industry. IA has maintained close dialog with the insurance industry. Taking into account the industry feedback, IA is open to explore test options, for example, on discount rate of the long-term insurance liabilities. IA has also reflected on the feedback in certain areas in QIS 2, for example, alignment with the Hong Kong Financial Reporting Standard (HKFRS) 17 on insurance contracts to a certain extent and the proposed stress levels of certain risks. This would be a continuous process of moderation exercise, aiming to strike a balance toward a pragmatic and effective approach.

 

Related Links

Comment Due Date: November 30, 2018

Keywords: Asia Pacific, Hong Kong, Insurance, Risk-based Capital Regime, QIS 2, HKFRS 17, Matching Adjustment, IFRS 17, IA

Related Insights
News

OFR Adopts Data Collection Rule on Centrally Cleared Repo Transactions

OFR adopted a final rule to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market.

February 20, 2019 WebPage Regulatory News
News

FHFA Finalizes Rule on Federal Home Loan Bank Capital Requirements

FHFA published, in Federal Register, the final rule to adopt, as its own, portions of the regulations of the Federal Housing Finance Board pertaining to the capital requirements for the Federal Home Loan Banks.

February 20, 2019 WebPage Regulatory News
News

SRB Publishes Framework for Performing Valuations in Resolution

The framework provides independent valuers and the general public with an indication of the expectations of SRB on the principles and methodologies for valuation reports, as set out in the legal framework.

February 19, 2019 WebPage Regulatory News
News

US Agencies Extend Consultation Period for the Proposed SA-CCR

US Agencies (FDIC, FED, and OCC) extended the comment period for a proposed rule to update their standards for how firms measure counterparty credit risk posed by derivative contracts.

February 18, 2019 WebPage Regulatory News
News

FED Extends Consultation Period for Stress Testing Rule

FED has published in the Federal Register a notice proposing amendments to the company run and supervisory stress test rules.

February 15, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for February 2019

EBA published answers to two questions under the Single Rulebook question and answer (Q&A) updates for this week.

February 15, 2019 WebPage Regulatory News
News

SEC Proposes Rule on Risk Mitigation Techniques for Uncleared SBS

SEC proposed a rule that would require the application of specific risk-mitigation techniques to portfolios of security-based swaps (SBS) that are not submitted for clearing.

February 15, 2019 WebPage Regulatory News
News

FSB Report Examines Financial Stability Implications of Fintech

FSB published a report that assesses fintech-related market developments and their potential implications for financial stability.

February 14, 2019 WebPage Regulatory News
News

US Agencies Amend Regulatory Capital Rule to Allow Phase-In for CECL

US Agencies (FDIC, FED, and OCC) adopted the final rule to address changes to credit loss accounting under the U.S. generally accepted accounting principles; this includes banking organizations’ implementation of the current expected credit losses (CECL) methodology.

February 14, 2019 WebPage Regulatory News
News

FASB Proposes Taxonomy Improvements for the Credit Losses Standard

FASB proposed the taxonomy improvements for the proposed Accounting Standards Updates on Targeted Transition Relief for Topic 326 (Financial Instruments—Credit Losses) and Topic 805 (on Business Combinations—Revenue from Contracts with Customers).

February 14, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2617