A new licensing regime for the regulation of insurance intermediaries is in the works.
Hong Kong is accelerating various regulatory and policy efforts to bring the local insurance industry forward and seize emerging opportunities in the region, according to Secretary for Financial Services & the Treasury James Lau who spoke at the Annual Reception of the Hong Kong Federation of Insurers.
The move is set to enable Hong Kong to better service its rapidly ageing population which is estimated to account for almost a third (29%) of the population by 2036.
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“We are working with the HKFI to formulate proposals on tax concession for premiums of deferred annuity products. This will encourage the development of the deferred annuity market as another option under the voluntary third-pillar for retirement protection,” Lau said.
The development of a statutory licensing regime by the newly-created Insurance Authority for the regulation of insurance intermediaries is set to bring Hong Kong in line with international standards. The regime is set to kick into effect by mid-2019.
Measures revealed by China’s central bank at the Boao forum to liberalise China’s economy is also set to generate spillover effects for Hong Kong. This includes a raise in foreign equity cap in life insurance companies to 51% by late June 2018 and a full elimination of the cap within three years.
The increased flow of people and capital into Hong Kong with the development of the Greater Bay Area and Belt & Road initiatives is set to generate higher local and cross-border cooperation amongst insurers in Guangdong, Hong Kong and Macau.
“As for the Belt & Road Initiative, Hong Kong has the potential to emerge as a major risk management centre for large-scale investments and infrastructure projects,” Lau added. “Aside from direct insurance and insurance brokerage services to Mainland enterprises, there are opportunities in reinsurance and captive insurance in particular.”
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