ComplianceOne Insurance Newsletter – May 2026
The topics discussed in this monthly newsletter are as follows:
Regulatory Updates
Regulatory Updates
1. IA Publishes Consultation Conclusions on Enhancements to the Risk-based Capital Regime to Incentivise Infrastructure Investment
On 8 May 2026, the Insurance Authority (“IA”) published the consultation conclusions on proposed amendments to the Insurance (Valuation and Capital) Rules (Cap. 41R) under the Risk-based Capital (“RBC”) regime.
**These amendments relate to the Risk-based Capital regime and apply only to authorised insurers. They do not apply to licensed insurance intermediaries, which are subject to a separate regulatory framework under the Insurance Ordinance. **
The draft amendment rules were first published in February 2026 for public consultation following a comprehensive review of the RBC regime. Respondents were generally supportive of the proposals. Feedback focused mainly on the scope of eligible infrastructure investments and the applicable reduction factors. The IA has carefully reviewed all comments and incorporated appropriate refinements into the final draft.
The finalised amendment rules will be submitted to the Legislative Council for negative vetting, with a target implementation date of 31 December 2026. The IA expressed its appreciation to all stakeholders who participated in the consultation process.
SIGNIFICANCE:
For authorised insurers, the changes will provide greater flexibility in asset allocation. Insurers with substantial long-duration liabilities are expected to review their investment strategies and consider increasing exposure to eligible infrastructure assets once the rules take effect. The IA’s willingness to refine the proposals based on industry feedback reflects a balanced approach that maintains prudential standards while supporting broader policy objectives.
Licensed insurance intermediaries and service providers should be aware of this development when advising insurer clients on investment strategy and asset-liability management, even though the changes do not directly impact broker operations.
[End of ComplianceOne Insurance Newsletter – May 2026]
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