China Banking and Insurance Regulatory Commission further extends preferential treatment for the Hong Kong insurance industry
5 August 2021
The China Banking and Insurance Regulatory Commission (CBIRC) today (5 August 2021) announced an extension of the preferential treatment accorded to Hong Kong under the “China Risk Oriented Solvency System” (C-ROSS) for another year to 30 June 2022, thus allowing the capital requirement of Mainland insurers ceding businesses to qualified Hong Kong professional reinsurers to be lowered continuously.
The CBIRC said that extension of the preferential treatment is helpful in forging Hong Kong into a global risk management centre while complementing development strategies of the Mainland insurance industry.
The Insurance Authority (IA) pointed out that the preferential treatment is conducive to enhancing cross-border financial connectivity, injecting impetus into the active participation and support of Hong Kong in both the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development, strengthening its advantages as a regional insurance hub and promoting diversified socio-economic development.
The preferential treatment is based on the Equivalence Assessment Framework Agreement on Solvency Regulatory Regime1signed between the former China Insurance Regulatory Commission and the former Office of the Commissioner of Insurance on 16 May 2017. It was implemented by the CBIRC in July 2018 and subsequently extended to 30 June this year.
For details of the preferential treatment, please refer to the relevant notice published by the CBIRC (Chinese version only).
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Notes:
1 Under the Equivalence Assessment Framework Agreement on Solvency Regulatory Regime, the insurance regulators in the Mainland and Hong Kong agreed to consider giving each other’s industry preferential treatment during the transitional period before the completion of the equivalence assessment, which will end in May 2025.