IA Replaces OCI as the Regulator of Insurance Companies in Hong Kong
In Hong Kong, the Insurance Authority (IA) will replace the Office of the Commissioner of Insurance (OCI), a government department, and will regulate insurance companies starting June 26, 2017. The OCI will be disbanded on the same day. Certain other pieces of subsidiary legislation, which were published in the Gazette on April 21, 2017, also take effect from June 26, 2017.
The IA is a regulatory body independent of the government and the industry. Empowered by the Insurance Ordinance (Cap. 41), the IA's principal function is to regulate and supervise the insurance industry to promote the general stability of the insurance industry and protect policy holders. Since its establishment in December 2015, the IA has been preparing for the takeover of regulatory functions in phases. The enhanced regulatory regime has expanded the scope of regulatory oversight over insurance companies. Within two years, the IA will further take over the direct regulation of insurance intermediaries from the three Self-Regulatory Organizations (SROs) through a statutory licensing regime, thus protecting policyholders in a more comprehensive manner. The three SROs are the Insurance Agents Registration Board (established under the Hong Kong Federation of Insurers), the Hong Kong Confederation of Insurance Brokers, and the Professional Insurance Brokers Association. Upon completing the changeover, the IA will start off with about 180 staff, gradually expanding to about 300 when it starts regulating insurance intermediaries.
The establishment of the IA and its initial years of operation will be funded by the government. In the long run, the IA has to be financially independent of the government and recover its operating costs. The Insurance Ordinance provides for the IA to collect an annual authorization fee from insurance companies and user fees for specific services with effect from June 26, 2017. The IA is required by law to set up two Industry Advisory Committees to advise it, one on matters relating to long-term business and one on general business. A separate subsidiary legislation for the collection of a levy on premiums from policy holders with effect from January 01, 2018 has been submitted to the Legislative Council for vetting.
Related Links
Revised Subsidiary Legislation and Statutory Forms
Keywords: Asia Pacific, Insurance, Hong Kong, IA, OCI, Insurance Ordinance
Previous Article
EIOPA Publishes Its Sixth Consumer Trends ReportRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
