The Insurance Authority (IA) welcomes the initiatives to facilitate the development of the insurance industry announced in the Chief Executive’s 2018 Policy Address today (10 October 2018). The initiatives include introducing legislative amendments to allow for the formation of special purpose vehicles specifically for issuing insurance-linked securities (ILS), and tax reliefs to promote the development of marine insurance and the underwriting of specialty risks in Hong Kong.
“By forming special purpose vehicles to issue ILS, insurers will be able to use this risk management tool to transfer their risks to the securities market. This will improve insurers’ risk acceptance capacity and thus help promote the insurance industry’s development in the long run. We will actively work with the Government on the legislative amendments to allow for the issuance of this new type of securities in Hong Kong. This will provide insurers with an additional risk management tool and institutional investors with an alternative investment vehicle for diversifying their investment risks,” an IA spokesperson said.
“In addition, the introduction of tax reliefs to encourage the development of marine insurance in Hong Kong will help strengthen Hong Kong’s role as the risk management centre for Belt and Road projects and as a regional insurance hub,” the spokesperson added.
Apart from facilitating market development, the IA also attaches great importance to enhancing professional and ethical standards of insurance intermediaries. We welcome the launch of the Ethics Promotion Campaign for insurance intermediaries by the Independent Commission Against Corruption (ICAC) as set out in the Policy Agenda. Meanwhile, the IA is consulting the public on the codes and guidelines for the regulation of insurance intermediaries under the statutory licensing regime to be implemented in mid-2019. It is suggested that individual licensees should attend at least three hours of Continuing Professional Development (CPD) courses in ethics or regulations every year.
