Hong Kong’s Insurance Authority (IA) has expressed its approval for a decision by the China Banking and Insurance Regulatory Commission (CBIRC) to regularise preferential treatment for the Hong Kong insurance industry.
The CBIRC has moved to include the preferential treatment for Hong Kong as an integral part of the Solvency Regulatory Rules II for Insurance Companies.
Since first being introduced in 2018, the preferential treatment has been extended annually, and applies to the capital requirements of mainland insurers when they cede businesses to Hong Kong reinsurers.
The rules also prescribe the capital requirement for mainland insurance institutions issuing catastrophe bonds in Hong Kong.
The CBIRC said that these measures have implemented the expansion of the national opening-up policy and strengthened the mutual trust in supervisory work between the mainland and Hong Kong.
This progress, it adds, is conducive to the better risk management of the industry and for enhancing stable development for both markets.
On the other hand, the IA pointed out that the decision of CBIRC reflects the importance of Hong Kong’s position as a global risk management centre under the ‘dual circulation’ economic strategy.
Additionally, the IA argues that the decision will help the Hong Kong industry’s contribution to facilitating the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the Belt and Road Initiative.
