Hong Kong risk-based capital regime rollout marks milestone: Insurance Authority
July 1 2024 by InsuranceAsia News
The risk-based capital (RBC) regime has come into operation on July 1, marking a milestone for the insurance industry as it enhances protection for policyholders, according to statement issued by the Hong Kong Insurance Authority (HKIA).
The roll-out of the new regime in July, as widely expected by the industry, follows the commencement of Insurance (Amendment) Ordinance 2023 and the relevant subsidiary legislation. It also follows the promulgation of new or revised guidelines by the HKIA that tie in with the regime, it said.
“The introduction of the RBC regime will strengthen the financial soundness of insurers in Hong Kong by taking a modular approach for an assessment more sensitive to each insurer’s risk profile while providing closer alignment with international standards,” said a spokesperson of the HKIA in a statement.
“Its implementation marks a significant milestone for the insurance industry, enhancing protection for policy holders and solidifying Hong Kong’s role as a global insurance hub,” it added.
The HKIA has engaged closely with industry stakeholders in developing the subsidiary legislation and relevant guidelines, it said, and “will continue to maintain close communication with the industry in the implementation of the new regime.”
As reported by InsuranceAsia News, the HKIA has in its conclusion of its six draft rules for the implementation of the RBC regime in April extended the transitional period for insurers to submit financial statements to three years, from two years as proposed earlier, as it heeded the industry’s demand for more time to get familiar with the new reporting requirements.
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