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FOR IMMEDIATE RELEASE
HONG KONG - SEPTEMBER 04, 2020 09:38 AM (EDT)
AM Best believes Hong Kong’s proposed Group Capital Rule (GCR) will be beneficial to the group-wide risk and capital management culture of insurance entities.
A new Best’s Commentary, titled, “New Group Capital Rule to Boost Hong Kong Insurance Market,” states that the proposed regulation, which would augment the current regulatory framework to allow Hong Kong’s Insurance Authority (IA) to monitor multinational insurance groups on a group basis, will enhance the regulator’s supervision of insurance holding companies. The IA acts as the group supervisor to several multinational insurance organisations, and currently takes an indirect approach that mainly involves the continual fit and proper assessments of the insurance holding companies’ ability to manage their subsidiaries, as well as liaison and cooperation with other regulators of a group’s member operations.
AM Best notes that the GCR will complement recent insurance regulatory headway in Hong Kong, such as the implementation of risk-based capital and enterprise risk management requirements, and serve in the development of a more holistic and robust insurance supervision framework. Additionally, the preferential treatment to capital solvency regimes between the China Banking and Insurance Regulatory Commission and the IA will foster greater mutual understanding between the two insurance supervisors. The closer collaboration between the regulators across jurisdictions also will help to reduce compliance costs for the insurance industry.
To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=300777 .
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.