Proposed Group Capital Rule to boost HK insurance market - AM Best

KUALA LUMPUR, Sept 7 -- Global credit rating agency, AM Best believes Hong Kong’s proposed Group Capital Rule (GCR) will be beneficial to the group-wide risk and capital management culture of insurance entities.

A new Best’s Commentary, titled ‘New Group Capital Rule to Boost Hong Kong Insurance Market’, states the proposed regulation - set to augment current regulatory framework to allow Hong Kong’s Insurance Authority (IA) to monitor multinational insurance groups on a group basis - will enhance the regulator’s supervision of insurance holding companies.

According to a statement, the IA acts as the group supervisor to several multinational insurance organisations.

Currently, the IA takes an indirect approach that mainly involves continual fit and proper assessments of the insurance holding companies’ ability to manage their subsidiaries, as well as liaison and cooperation with other regulators of a group’s member operations.

AM Best notes the GCR will complement recent insurance regulatory headway in Hong Kong, such as implementation of risk-based capital and enterprise risk management requirements, and serve in the development of a more holistic and robust insurance supervision framework.

Additionally, the preferential treatment to capital solvency regimes between the China Banking and Insurance Regulatory Commission and the IA will foster greater mutual understanding between the two insurance supervisors.

For details, visit www.ambest.com.

-- BERNAMA