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A comparative overview of the Hong Kong and Singapore regulatory frameworks for the supervision of insurance groups

The Hong Kong government recently announced that the insurance group-wide supervision framework (GWS framework) will commence on 29 March 2021. The GWS framework will be implemented via the Insurance (Amendment) (No. 2) Ordinance 2020, which was passed by the Hong Kong legislature on 17 July 2020.

Currently, the Insurance Authority (IA) has no direct regulatory authority over insurance holding companies that are not themselves authorised insurers, nor any regulatory powers over their group companies that are not carrying on regulated business in Hong Kong. Under the GWS framework, the IA will be empowered to directly regulate Hong Kong-incorporated holding companies of authorised insurers, whether or not the holding company is itself an authorised insurer. Through the exercise of its regulatory powers over the holding company, the IA will also be expressly empowered to exercise supervisory powers over the group of insurance companies held by it, including those insurance companies that are incorporated outside Hong Kong. This will allow the IA to more effectively exercise group-wide supervision of the entire group.

Our bulletin considers the development of the GWS framework, the basis of designation as a designated insurance holding company, its scope, key obligations under the framework, IA’s regulatory powers and the general impact on the insurance industry as well as a comparison to the Singapore regulatory framework.

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