22 February 2021
The Insurance (Amendment) (No. 2) Ordinance 2020 (the “IAO”) was enacted in July 2020. The IAO introduces an insurance group-wide supervision (“GWS”) framework to empower the Insurance Authority (the “IA”) to exercise direct regulatory powers over Hong Kong-incorporated holding companies of insurance groups.
Notable amendments to the Insurance Ordinance (Cap. 41) by the IAO include the following:
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(a) |
the IA may designate a Hong Kong-incorporated insurance holding company of an authorised insurer that belongs to an insurance group as a “designated insurance holding company” (“DIHC”) if certain conditions are met, and determine which members of the insurance group will be subject to the supervision by IA (“supervised group”); |
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(b) |
prior approval must be obtained from the IA before a person may become a shareholder controller of a DIHC or be appointed as the chief executive, director, and key person in control functions of a DIHC; and |
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(c) |
a DIHC must not make or allow any member of the supervised group to make any major acquisition that is material to the group unless with the IA's prior approval or the acquisition has been assessed through an assessment framework as being non-material to the group. |
These amendments may be relevant to banks which intend to acquire authorised insurers or insurance groups, or banks that are currently controllers of authorised insurers.
The Government press release on the commencement of the GWS framework is accessible here: link
A copy of the IAO is available here: link
A copy of the Commencement Notice is available here: link
For further information, please contact:
Simon Deane, Partner, Deacons
simon.deane@deacons.com
