CBIRC amended the Insurance Company Solvency Regulatory Rules titled Q&A No. 1: the Counter-party Default Risk Factors for Qualified Hong Kong Reinsurance Companies during the Transition Period of the Equivalence Assessment Framework Agreement on Solvency Regulatory Regime (also known as Q&A No. 1). The amendment clarifies that, for the qualified reinsurance institutions in Hong Kong, the term of reinsurance credit risk factor applicable when ceded from Mainland China’s direct insurance companies is being extended by another year to June 30, 2020.
In May 2017, the former CIRC and the then Office of Commissioner of Insurance (OCI) in Hong Kong (now Insurance Authority) signed the Framework Agreement. Both parties agreed that the transition period of equivalence recognition started on signing of the agreement. To implement the Framework Agreement, CBIRC issued the Q&A No.1 in June 2018, granting a one-year provisional treatment on credit risk exposure to Hong Kong reinsurance counterparties in solvency calculation in the transition period.
The signing of the Framework Agreement and the revised Q&A No.1 are important measures from CBIRC to help maintain Hong Kong’s prosperity and stability and to further opening up of the financial sector. These measures will promote the common development of insurance markets in Mainland China and in Hong Kong. Moving forward, CBIRC and Hong Kong Insurance Authority will continue to study the regulatory policies applicable to both parties under the equivalence framework of solvency regulation.
Related Links (in Chinese)
Keywords: Asia Pacific, China, Hong Kong, Insurance, Reinsurance, Framework Agreement, Transition Period, Insurance Authority, Solvency Regime, Equivalence Assessments, CBIRC
Previous ArticleEBA Regards Regulatory Framework in Argentina to be Equivalent to EU
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.