Featured Product

    IA Consults on Revised Guideline for Risk Management by Insurers

    January 03, 2019

    IA had published a second consultation on the revised guideline on enterprise risk management (ERM), with comment period ending on January 24, 2019. IA had conducted an initial consultation on the draft guideline on ERM in May 2018 and had received comments from the insurance industry and professional bodies. After studying the comments, IA has revised the draft guideline, for which it is seeking further consultation.

    The revised draft guideline, proposed to be effective on January 01, 2020, has also taken into account the overarching principles of developing the risk-based capital regime that include compliance with the Insurance Core Principles published by IAIS; the market landscape and needs of insurance industry; and the financial health and resilience of insurance industry for the protection of policyholders. The key feedback from the initial consultation and proposed enhancements was related to the following:

    • Principles-based approach
    • Three-tier group-wide supervisory approach
    • Introduction of “Pillar 2 Capital amount"
    • Preparation of the Own Risk and Solvency Assessment (ORSA) report
    • ORSA of Hong Kong branches of overseas insurers
    • Prescribed scenarios in Stress and Scenario Testing in ORSA
    • Regulatory capital requirements referred to in the ORSA Report
    • Relief measures in early years of implementation of the Guideline

    This second consultation is a critical step toward the expected finalization of the guideline in 2019. HKMA strongly encourages insurers to execute gap analysis, implement action plans to enhance their ERM framework, and put in place an ORSA as soon as is practical. The insurers facing practical issues with regard to the compliance with the guideline should contact their case officers and demonstrate to IA the practical difficulties encountered and formulate an action plan for phased implementation within a reasonable timeframe. 


    Related Links

    Comment Due Date: January 24, 2019

    Effective Date: January 01, 2020 (Proposed)

    Keywords: Asia Pacific, Hong Kong, Insurance, ERM, ORSA, Regulatory Capital, Pillar 2, Risk-based Capital Regime, ICP, IA

    Featured Experts
    Related Articles

    PRA Publishes Q&A on Property Valuation Requirements Under CRR

    PRA published a set of questions and answers (Q&A) covering common queries regarding residential and commercial property valuations, for the purpose of the Capital Requirements Regulation (CRR), during the period of disruption caused by COVID-19 pandemic.

    May 29, 2020 WebPage Regulatory News

    EBA Sets Out Supervisory Convergence Plan for 2020

    EBA published a report on convergence of supervisory practices in 2019.

    May 29, 2020 WebPage Regulatory News

    EBA Proposes Revised Standards for Own Funds and Eligible Liabilities

    EBA published a consultation paper on the draft amended regulatory technical standards on own funds and eligible liabilities.

    May 29, 2020 WebPage Regulatory News

    EBA Publishes Guidelines on Loan Origination and Monitoring

    EBA published guidelines on loan origination and monitoring, which bring together prudential standards and consumer protection obligations, along with the anti-money laundering and the Environmental, Social, and Governance (ESG) considerations.

    May 29, 2020 WebPage Regulatory News

    IOSCO Consults on Outsourcing Principles for Operational Resilience

    IOSCO proposed updates to its principles for regulated entities that outsource tasks to service providers.

    May 28, 2020 WebPage Regulatory News

    MAS Consortium to Develop AI Fairness Metrics for Credit Scoring

    MAS announced that the first phase of the Veritas initiative will commence with the development of fairness metrics in credit risk scoring and customer marketing.

    May 28, 2020 WebPage Regulatory News

    BoE Updates Definitions for BTL Data Collection

    BoE published the Statistical Notice 2020/4 to update the buy-to-let (BTL) Phase 2 and Phase 3 definitions for the Interest Rate Type data item.

    May 28, 2020 WebPage Regulatory News

    FSI Examines Financial Stability Implications of Payment Deferrals

    FSI published a brief note that examines challenges facing the banking sector as a result of the payment deferral programs put in place to support borrowers affected by the COVID-19 pandemic.

    May 28, 2020 WebPage Regulatory News

    RBNZ Publishes Financial Stability Report for May 2020

    RBNZ published the financial stability report for May 2020. This review of the financial system in the country highlights that the economic disruption associated with COVID-19 will present challenges to the financial system.

    May 27, 2020 WebPage Regulatory News

    PRA Finalizes Policy on Prudent Person Principle Under Solvency II

    PRA published the policy statement PS14/20, which contains the supervisory statement SS1/20 and the feedback to responses to the consultation paper CP22/19 on expectations for investment by firms in accordance with the Prudent Person Principle, or PPP, as set out in the Investments Part of the PRA Rulebook.

    May 27, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5234