Featured Product

    IA Publishes Guideline on Enterprise Risk Management for Insurers

    July 05, 2019

    IA of Hong Kong published the guideline GL-21 on enterprise risk management, or ERM, for insurers. The guideline sets out the objectives and requirements on ERM and the Own Risk and Solvency Assessment (ORSA), in addition to providing the impetus for insurers to establish effective tools to identify, monitor, manage, and mitigate risks. GL-21 shall take effect from January 01, 2020. Additionally, to monitor the overall progress of the industry in enhancing their ERM frameworks of insurers, IA is conducting a Preparation Status Survey that insurers are expected to complete on the best effort basis. Insurers are requested to complete the survey in Excel file format and have it returned to IA by August 16, 2019.

    The main objective of the guideline GL-21 is to nurture a sound risk culture in the insurance industry that should be reflected in the values, attitudes, and norms of business behavior. The guideline sets out the requirements for Pillar 2 of the risk-based capital regime in Hong Kong and provides the impetus for authorized insurers to:

    • Put in place a robust system of risk governance
    • Proactively identify and assess their risk exposure
    • Maintain sufficient capital to cover risks not captured or not adequately captured under Pillar 1
    • Develop and enhance risk management techniques in monitoring and managing these risk exposures

    IA has finalized the guideline on ERM, post two consultations—one consultation was conducted in May 2018 while the second was conducted in January 2019. IA issues GL-21 pursuant to section 133 of the Insurance Ordinance (Cap. 41) and its principal function is to regulate and supervise the insurance industry for the protection of existing and potential policy holders. This guideline takes into account the relevant Insurance Core Principles (ICPs), standards, guidance, and assessment methodology promulgated by IAIS. This guideline is part of the Pillar 2 of the risk-based capital regime for the insurance industry in Hong Kong. The risk-based capital regime in Hong Kong comprises three pillars: Pillar 1 covers the regulatory capital rules and requirements, Pillar 2 covers corporate governance and ERM, and Pillar 3 covers reporting and disclosure requirements.

     

    Related Links

    Effective Date: January 01, 2020

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

    Related Articles
    News

    EU Amends CRD4 and CRD5 as Part of Capital Markets Recovery Package

    EU published Directive 2021/338, which amends the Markets in Financial Instruments Directive (MiFID) II and the Capital Requirements Directives (CRD 4 and 5) to facilitate recovery from the COVID-19 crisis.

    February 26, 2021 WebPage Regulatory News
    News

    EU Committee Recommends Systemic Risk Buffer of 4.5% in Norway

    The Standing Committee of the European Free Trade Association (EFTA) recommended that a systemic risk buffer level of 4.5% for domestic exposures can be considered appropriate for addressing the identified systemic risks to the stability of the financial system in Norway.

    February 25, 2021 WebPage Regulatory News
    News

    PRA Clarifies Approach to Onshoring of Credit Risk Rules for UK Banks

    In a recent statement, PRA clarified its approach to the application of certain EU regulatory technical standards and EBA guidelines on standardized and internal ratings-based approaches to credit risk, following the end of the Brexit transition.

    February 25, 2021 WebPage Regulatory News
    News

    FSB Sets Out Work Priorities for 2021

    In a recently published letter addressed to the G20 finance ministers and central bank governors, the FSB Chair Randal K. Quarles has set out the key FSB priorities for 2021.

    February 25, 2021 WebPage Regulatory News
    News

    EU Publishes Corrigendum to Revised Capital Requirements Regulation

    EU published, in the Official Journal of the European Union, a corrigendum to the revised Capital Requirements Regulation (CRR2 or Regulation 2019/876).

    February 25, 2021 WebPage Regulatory News
    News

    ESAs Issue Statement on Application of Sustainability Disclosures Rule

    ESAs published a joint supervisory statement on the effective and consistent application and on national supervision of the regulation on sustainability-related disclosures in the financial services sector (SFDR).

    February 25, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Frameworks

    EC published a public consultation on the review of crisis management and deposit insurance frameworks in EU.

    February 25, 2021 WebPage Regulatory News
    News

    HKMA Enhances Loan Guarantee Scheme to Alleviate Pressure on SMEs

    HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.

    February 24, 2021 WebPage Regulatory News
    News

    EBA Proposes Standards for Supervisory Cooperation Under IFD

    EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.

    February 24, 2021 WebPage Regulatory News
    News

    BoE Addresses Banks in Scope of First Resolvability Assessment

    BoE issued a letter to the CEOs of eight major UK banks that are in scope of the first Resolvability Assessment Framework (RAF) reporting and disclosure cycle.

    February 24, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6629