The High Court of Hong Kong ordered the winding up of Tiger Insurance Company Limited on 26 September 2022 and appointed Lai Kar Yan and Gan Zhongheng of Deloitte as joint and several liquidators. Existing Tiger Insurance policies are not affected by the winding-up order, and policyholders may file claims as usual. Claims arising from motor third-party liability and employees' compensation are estimated to account for about 94% of its insurance liabilities and will be handled by the compensation funds of two bureaus, with the remaining about 6% handled by the liquidators.
Why read this: The announcement sets out item by item the division of claims handling and enquiry hotlines, and discloses that about 94% of liabilities will be handled by the compensation funds of two bureaus, allowing readers to check arrangements for their own policies.
The manager appointed by the Insurance Authority has filed a winding-up petition against Tai Ka Insurance Company Limited, alleging that Tai Ka is insolvent and has breached statutory regulatory requirements. About 30,000 policies are affected, mainly motor policies (about 96%), which will remain in force until their expiry dates; motor third-party and employees' compensation claims will be handled by MIB and ECIIB, which are estimated to account for about 94% of Tai Ka Insurance's liabilities. The HK$250 million statutory deposit held by Tai Ka and held in custody in the name of the Insurance Authority, together with assets expected to be realised, should be sufficient to pay all valid claims.
Why read this: The announcement sets out the handling arrangements for about 30,000 affected policies and various claims, and states that the HK$250 million statutory deposit and two compensation funds are sufficient to meet insurance liabilities.
The Insurance Authority and the Hong Kong Monetary Authority each issued a circular on 1 April 2022, clarifying regulatory standards for the use of premium financing to take out life insurance policies, and introduced the Important Facts Statement — Premium Financing, requiring customers to complete and sign it for each new policy application using premium financing. The circulars also cover affordability assessment, additional measures for customers whose borrowing may be excessively leveraged, sales practices and training, with all regulatory standards and requirements taking effect on 1 January 2023.
Why read this: The circulars state an effective date of 1 January 2023 and set out areas including affordability assessment, allowing compliance timelines for insurers and intermediaries to be checked.
Mar 11Fri
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The Insurance Authority has issued a circular to all authorised life insurance companies, opening up the distribution of all life insurance products, including investment-linked life insurance, through online channels to reduce the risk of infection during the sales process. The temporary facilitation measures for non-face-to-face sales of specified protection products will be extended to 30 September 2022, the cooling-off period for policies sold through the remote underwriting sandbox must be extended to no less than 30 days, and the Insurance Authority has set up a fast track to process sandbox applications.
Why read this: The circular sets out three specific arrangements, including the extension of the facilitation measures to 30 September 2022 and a cooling-off period of no less than 30 days, allowing readers to check the terms applicable when they took out their policies.
The Insurance Authority welcomes the China Banking and Insurance Regulatory Commission formally incorporating the preferential measures for the Hong Kong insurance industry into the Insurance Company Solvency Regulatory Rules (II). Implemented since 2018, the measures allow an equivalent preferential factor to apply when mainland insurance companies cede business to qualifying professional reinsurance companies in Hong Kong. The rules also specify the relevant capital requirements for mainland insurance institutions issuing catastrophe bonds in Hong Kong.
Why read this: The preferential measures have been extended annually since their implementation in 2018, and have now been formally incorporated into the Rules (II), allowing readers to verify the long-term arrangements and scope of application of the measures.
The Insurance Authority reprimanded two insurance companies, formerly known as MetLife, for breaching seven specified provisions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, and imposed a fine of HK$7 million. The investigation found that between January 2015 and October 2017, the two companies failed to maintain effective procedures to identify politically exposed persons and monitor suspicious transactions. The two companies have taken remedial measures and were acquired by FWD Group on 30 June 2020.
Why read this: The press release specifies the breach period and the seven provisions involved, allowing readers to verify the basis for the fine and each of the control deficiencies.
On 7 January 2022, the Insurance Authority appointed a manager under the Insurance Ordinance (Cap. 41) to take over the affairs and assets of Titan Insurance in full. The Insurance Authority said Titan's investment activities and fund allocation may have breached statutory requirements; nearly 80 per cent of its business is motor insurance, involving about 10,000 taxis, accounting for a 1.43 per cent share of the general direct insurance business market, and the coverage terms of existing policies are unaffected.
Why read this: The Insurance Authority explained that the takeover was due to Titan's investment activities and fund allocation potentially breaching statutory requirements, and listed its 1.43% market share and that existing policies remain unaffected, allowing readers to check their own situation.
The Insurance Authority, the Mandatory Provident Fund Schemes Authority and the Hong Kong Monetary Authority announced the joint launch of a mystery shopping inspection scheme to understand intermediaries' practices in selling qualifying deferred annuity policies (QDAP) and tax-deductible voluntary contributions (TVC) under the Mandatory Provident Fund in Hong Kong, marking the first time the three financial regulators have collaborated on such a scheme. The scheme is expected to commence in January 2022 and will target intermediaries regulated by the three bodies that sell or promote these two tax-deductible products in Hong Kong. Results will be used to complement each body's regulatory work, and relevant issues and good practices will be shared with the industry.
Why read this: The press release specifies that the scheme covers three categories of regulated intermediaries and states when it will commence, allowing readers to verify what sales practices will be inspected.
The Insurance Authority and the Hong Kong Monetary Authority issued a joint circular on 30 September 2021, setting out the key findings of their joint inspections of the premium financing business of long-term business insurers and licensed insurance intermediaries. The inspections were conducted in the second half of 2020, and the two regulators will contact the industry to clarify the standards to be met when conducting premium financing activities. Chief Executive Clement Cheung reminded that premium financing involves the risks of leveraged borrowing and rising interest rates.
Why read this: The inspections were conducted in the second half of 2020, and the circular highlights the leverage and interest rate risks of premium financing, allowing readers to check the policy arrangements they hold.
Translation is not available yet. Showing the Traditional Chinese version.
The Insurance Authority published provisional statistics for the Hong Kong insurance industry in the first half of 2021. Total gross premiums reached $307 billion during the period, down 2.2% from the same period last year. Total premium income from long-term business was $273.6 billion (down 2.4%), while new business premiums from mainland visitors contracted to about $200 million (down 96.5%). Gross premiums for general insurance business were $33.4 billion (down 0.3%), and overall underwriting profit improved from $624 million to $794 million.
Why read this: Lists gross premiums for the first half of the year and breakdown figures for long-term and general business, along with year-on-year changes, allowing verification of trends in new business premiums from mainland visitors and underwriting profits.
The China Banking and Insurance Regulatory Commission (CBIRC) announced that the preferential measures under China's risk-oriented solvency regime for Hong Kong will be extended by one year to 30 June 2022. Capital requirements for mainland insurers ceding business to qualifying Hong Kong professional reinsurers can continue to be reduced. The Insurance Authority said the measures help strengthen cross-border financial links and reinforce Hong Kong's advantages as a regional insurance hub. The measures are based on the framework agreement signed on 16 May 2017, with a transition period running until May 2025.
Why read this: The text states that the preferential measures originated from the framework agreement signed in May 2017, and specifies the extended deadline and relevant document number, allowing readers to verify the basis.
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The Insurance Authority released provisional statistics for the Hong Kong insurance industry for the first three quarters of 2020, with gross premiums reaching $461.1 billion, up 5.5% year on year. Premium income from long-term business was $412.7 billion, up 5.1%, while gross premiums for general insurance were $48.5 billion, up 9.3%. New policy premiums from mainland visitors contracted 68.3% in the third quarter to $266 million.
Why read this: Gross premiums for the first three quarters totalled $461.1 billion, up 5.5% year on year, while new policy premiums from mainland visitors fell a cumulative 81.9% over the same period, providing a contrast between the rise and the fall.
On 7 August 2020, the Insurance Authority urged the public to stay alert and watch out for five fraudulent apps impersonating the official mobile app of AIA International Limited. AIA has confirmed they are unrelated to it, and the case has been referred to the Hong Kong Police Force for investigation. Anyone who has provided personal information or carried out insurance transactions through the relevant websites or apps should call the AIA customer service hotline on 2232-8888 and report the case to the police.
Why read this: Lists five fraudulent apps impersonating AIA and their source URLs, and sets out contact and police-reporting arrangements for those who have provided personal information or carried out transactions.
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The Insurance Authority announced a series of temporary facilitative measures to reduce the risk of insurance intermediaries contracting the novel coronavirus when meeting clients. The measures cover only qualifying deferred annuity policies and voluntary health insurance products. During sales, after clearly disclosing key information, there is no need to conduct a financial needs analysis. The cooling-off period is extended to no less than 30 days, and the measures will run until the end of the current year of assessment on 31 March 2020.
Why read this: The measures cover only the two tax-deductible products and specify cooling-off periods and implementation deadlines, allowing readers to check whether they are affected.