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Reinsurance / Specialty > Reinsurance > Preferential Treatment for Hong Kong Professional Reinsurers under the China Risk Oriented Solvency System (“C-ROSS”)

Preferential Treatment for Hong Kong Professional Reinsurers under the China Risk Oriented Solvency System (“C-ROSS”)

As agreed between the Insurance Authority (IA) and the National Financial Regulatory Administration (NFRA), the preferential treatment for eligible Hong Kong professional reinsurers under the China Risk Oriented Solvency System (C-ROSS) has been formalised. Under the preferential treatment, when Chinese Mainland direct insurers cede business to an eligible Hong Kong professional reinsurer, the Chinese Mainland direct insurers can benefit from a lower counterparty credit risk charge at 0.077.  Hong Kong professional reinsurers shall fulfill the following minimum criteria to become eligible:

  1. Credit rating: A minimum credit rating of A- is required; and
  2. Solvency ratio: For reinsurers engaged in general insurance business, the minimum solvency ratio required is 150%. For reinsurers engaged in long-term business, the minimum solvency ratio required is 125%. For reinsurers engaged in both general and long-term businesses, a minimum solvency ratio of 150% applies.