The Risk-based Capital (RBC) regime for the Hong Kong insurance industry entered into operation yesterday (1 July 2024).
This followed the commencement of the Insurance (Amendment) Ordinance 2023 and the relevant subsidiary legislation, as well as the promulgation of new or revised guidelines by the Insurance Authority (IA) that tie in with the regime, according to a statement released by the regulator.
An IA spokesperson 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. Its implementation marks a significant milestone for the insurance industry, enhancing protection for policyholders and solidifying Hong Kong’s role as a global insurance hub.”
Since the passage of the Insurance (Amendment) Bill 2023 which provides the legal framework for the RBC regime, the IA has engaged closely with industry stakeholders in developing the subsidiary legislation and relevant guidelines. The IA will continue to maintain close communication with the industry in the implementation of the new regime.