ComplianceOne Insurance Newsletter – Sep 2024

The topics discussed in this monthly newsletter are as follows:

IA News Updates

1. Statistics showed Hong Kong insurance industry posted first increase in gross premiums in 3 years

The Insurance Authority (“IA”) has published the Hong Kong insurance business statistics for 2023, referring audited returns and actuarial data submitted by authorized insurers. The total gross premiums for the year marking a 0.8% increase compared to 2022.

Key Highlights:

Total Gross Premiums: HKD $542.1 Billion, up by 0.8% from the previous year.
General Insurance Business: Gross premiums of HKD $67.3 Billion, a 4.6% increase
Long Term Business: Total revenue premiums of in-force long term business were $474.8 billion, increased by 0.3% compare with previous year, continued to be dominated by the Individual Life category.

SIGNIFICANCE:

The 0.8% growth is particularly notable as it represents the first increase in gross premiums since the IA began releasing provisional statistics of the Hong Kong insurance industry in 2021.

2. IA hosting AML/CTF Seminars for insurance practitioners in Oct 2024

The IA will host two AML/CTF seminars on 28 and 29 October 2024, at the Hong Kong Science Museum in Tsim Sha Tsui. These seminars aim to enhance insurance practitioners’ awareness and understanding of AML/CTF regulatory requirements and recent ML/TF trends.

Who Should Attend?

Compliance Officers, Money Laundering Reporting Officers, and relevant personnel responsible for AML/CTF systems and control measures.
Each company may nominate up to 3 representatives.

CPD Hours:

The seminars are categorized as Type 7 Continuing Professional Development (CPD) activities under GL24.
Attendees will receive 3 CPD hours in the “Ethics or Regulations” category.

SIGNIFICANCE:

Each Company should only submit one enrolment form by 7 October 2024, via the provided Enrolment Link. Please also find the below Schedule Table for your reference.

3. Hong Kong’s pivotal role in supporting Belt and Road projects

On 11 September 2024, the IA hosted a breakout session at the Belt and Road Summit to explore the pivotal role of captive insurance in supporting Belt and Road projects, especially those focusing on less coal-intensive energy. The session emphasized how Hong Kong’s insurance professional services ecosystem can facilitate these projects.

Key Topics:

Captive Insurance: Managing risks from overseas energy projects and addressing challenges of energy transition.
Risk Management: Opportunities in sectors like electric vehicles benefiting from sustainable development.
Hong Kong’s Role: As an international risk management hub, Hong Kong is positioned to support captive insurers and serve as a preferred domicile for Mainland enterprises expanding globally.

SIGNIFICANCE:

The panel moderator highlighted the growing use of captives by Mainland enterprises to manage overseas project risks and enhance intra-group risk management. Emphasized Hong Kong’s readiness to provide comprehensive professional services to captive insurers.

4. Sigma Report on World Insurance 2023: Hong Kong’s role as international financial center

Hong Kong remains a global financial hub, as highlighted by the IA and the Sigma 3/2024 – World Insurance by Swiss Re. With the highest insurance penetration rate and second highest insurance density globally, Hong Kong’s total premiums reached HK$550 billion, ranking it 16th worldwide.

Robust regulatory framework developments:

Risk Based Capital (“RBC”) Regime: Introduced in July 2024, this regime ensures that capital requirements are more sensitive to each insurer’s asset-liability profile, promoting sophisticated risk management.
Public Disclosure: The focus is now shifting to public disclosure under Pillar 3 of the RBC regime, with ongoing industry collaboration to ensure transparency and mutual trust.
Quality Operating Environment: IA is dedicated to reviewing and optimizing the RBC regime parameters to incentivize insurer and brokers to conduct more business in Hong Kong.

SIGNIFICANCE:

Hong Kong’s unique advantages such as the “One Country, Two Systems” principle and “Dual Circulation” strategy strengthen its role as a key connector in Asia. The Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”) further boosts its appeal as a top international financial center.

[End of ComplianceOne Insurance Newsletter – September 2024]

For more details, please click on the title of the topic above.

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The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice.

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