The Insurance Ordinance (Cap. 41) was enacted in 1983 (originally named the Insurance Companies Ordinance and renamed in 2015) and is the basic legislation governing the supervision of the insurance industry in Hong Kong. It is administered by the Insurance Authority (IA, formerly the Office of the Commissioner of Insurance (OCI)).

Core provisions relating to captive insurers:

1. Legal definition. Section 2(7) of the Ordinance provides the legal definition of a captive insurer: it may only underwrite risks relating to companies within the same corporate group to which it belongs and may not underwrite third-party business outside the group.

2. Licensing conditions. Sections 6 and 8 provide that the carrying on of insurance business in or from Hong Kong requires authorisation by the IA. The minimum paid-up share capital of a captive insurer is HK$2 million (as against HK$20 million for a general insurer), and it must satisfy requirements concerning solvency, reinsurance arrangements and the fitness and propriety of directors and key persons in control functions.

3. Ongoing supervision. A licensed captive insurer must submit audited financial statements and solvency returns every year, and material changes in shareholding and changes of directors and key persons in control functions must be approved by, or notified to, the IA in accordance with the requirements of the Ordinance.

Official text: https://www.elegislation.gov.hk/hk/cap41