Hong Kong Insurance Industry – Governance, Risk and Compliance

Hong Kong Insurance Industry Regulation Overview

The IA is the regulator of the insurance industry in Hong Kong. The Commissioner of Insurance heads and plays a chief role in the IA. It is responsible for administering and supervising insurers and insurance intermediaries to protect and promote the insurance industry.

The Hong Kong insurance industry governance regulation research report provides a detailed analysis of the regulations for several insurance types including life, property, motor, and liability. The report also gives insights into recent and upcoming changes in non-admitted insurance regulations, taxation, and the legal system. Also, leverage our elaborate procedural review of new company registrations and operations based on key parameters such as license, FDI, minimum capital requirements, and solvency to better understand market avenues.

Hong Kong Insurance Industry – Key Regulators and Legislation

International Association of Insurance Supervisors (IAIS): The IAIS is a membership-driven global organization representing insurance regulators and supervisors. It formulates and issues various global insurance principles, standards, and guidance, provides training and support on issues related to insurance supervision and organizes meetings and seminars for insurance supervisors. The IAIS works closely with other financial sector standard-setting bodies and international organizations to promote financial stability.

The Hong Kong Federation of Insurers (HKFI): The HKFI is the self-regulatory body of insurers that promotes the development and advancement of Hong Kong’s insurance industry. The HKFI establishes confidence among consumers and serves their insurance needs through the promotion of insurance products. It cooperates with the government in the expansion and advancement of the insurance industry and acts as a medium of consultation and discussion on legislation and other matters between the insurance industry and the government.

A few of the laws regulating the Hong Kong insurance industry are:

• the Insurance Companies Ordinance 1983
• the Motor Vehicles Insurance (Third-Party Risks) Ordinance 1951
• the Marine Insurance Ordinance 1961

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Hong Kong Insurance Industry - Compulsory Insurance

A few of the compulsory insurances required within the Hong Kong insurance industry are:

• Motor Third-Party Liability Insurance
• Aviation Liability Insurance
• Marine Liability Insurance
• Professional Indemnity Insurance
• Social Security Insurance

Compulsory Insurance in Hong Kong

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Hong Kong Insurance Industry - Company Registration and Operation

Hong Kong must be registered and authorized by the Insurance Authority under Sections 5 and 6 of the Insurance Companies Ordinance for any company willing to operate an insurance business. The applicant must also submit to the IA the following supporting documents with the application form under Section 7 of the Ordinance.

Reinsurers need to obtain a license from the authority before commencing business operations in Hong Kong. They are also required to obtain separate licenses to operate reinsurance and insurance businesses.

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Hong Kong Insurance Industry – Taxation

Tax is imposed upon insurance premiums within the insurance industry in Hong Kong. The other taxes imposed are corporate income tax, corporate capital gains tax, and value-added tax.

Corporate Income Tax: In Hong Kong, the Inland Revenue Department administers the tax regime under the Inland Revenue Ordinance and Case Law. The country operates on a territorial basis of taxation; resident and non-resident companies are generally subject to tax on their income sourced from Hong Kong for businesses carried on in the country.

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Scope

• The report covers details of the insurance regulatory framework in Hong Kong.
• The report contains details of the rules and regulations governing insurance products and insurance entities.
• The report lists and analyzes key trends and developments pertaining to the country’s insurance regulatory framework.
• The report analyzes the rules and regulations about the establishment and operation of insurance businesses in the country.
• The report provides details of taxation imposed on insurance products and insurance companies.

Key Highlights

• The IA is the regulatory body supervising and regulating the insurance industry of Hong Kong.
• 100% foreign direct investment (FDI) is permitted in the Hong Kong insurance industry.
• Composite insurance is not permitted in Hong Kong.
• Reinsurers are not subject to any authorization for operating in Hong Kong.

Reasons to Buy

• Get FAQ-style analytical insights comprising 129 knowledge elements on insurance compliance applicable to the country.
• Gain insights into the insurance regulatory framework in Hong Kong.
• Track the latest regulatory changes and expected changes impacting the Hong Kong insurance industry.
• Gain detailed information about the key regulations governing the establishment and operation of insurance entities in the country.
• Understand key regulations and market practices about various types of insurance products.