Brief account on the regulatory framework of the insurance industry in Hong

Kong
Sources: http://www.oci.gov.hk/about/index.html
Background
The insurance industry in Hong Kong has a long history of 170 years. There are currently 156
authorised insurers and over 80,000 corporate/individual intermediaries providing a wide range
of insurance and risk management services.
The Role the Office of the Commissioner of Insurance.
The office is the insurance regulator in Hong Kong, empowered by the Insurance Companies
Ordinance to oversee the financial conditions and operations of authorized insurers. In addition,
we are also the market enabler, committed to facilitating both the healthy development of the
industry and the protection of policyholders (you may want to compare with the reasons for
insurance regulation mentioned in Chapter 8 of the textbook).
Regulatory Framework
1. Regulation of Insurers

Authorization
o Any company interested in carrying on insurance business in or from Hong Kong
may apply to the Insurance Authority ("IA") for authorization to do so under the
Insurance Companies Ordinance (Cap. 41) ("ICO").
o Capital Requirement (HK$10 million, or HK$20 million depends on the types of
insurers)
o Solvency Requirement
Maintenance of Assets in Hong Kong
Statutory Valuation Basis for Assets and Liabilities
Reporting Requirements
Intervention
Other Regulatory and Self-Regulatory Initiatives

2. Regulation of Insurance Intermediaries

The System
Insurance Agents
Insurance Brokers
1

Intervention
Insurance Intermediaries Quality Assurance Scheme
Other Regulatory and Self-Regulatory Initiatives

Insurance Companies Ordinance

An effective and responsive regulatory framework which instils public confidence is essential to
the healthy development of the insurance industry in Hong Kong.
The Insurance Companies Ordinance (Cap.41), which prescribes the regulatory framework for
insurers and insurance intermediaries, is being continuously reviewed and updated to keep in
pace with changing market conditions and international practices.

Insurance Claims Complaints Bureau

The Insurance Claims Complaints Bureau ("ICCB") was set up by the insurance industry in
February 1990. The ICCB had 122 members as at 29 April 2005. Guided by the principles of
fairness and reasonableness, the Insurance Claims Complaints Panel, an independent body
established under the ICCB, may look beyond the terms of insurance policies and provides
aggrieved claimants with an efficient and less costly avenue to resolve their claims disputes in
respect of their personal insurance policies. The ICCB is empowered to make an award of up to
HK$800,000 in each case.