Hong Kong’s Insurance Authority (IA) has designated three insurance holding companies as part of its group-wide supervision (GWS) framework. These holding companies are: AIA Group Limited, FWD Management Holdings Limited, and Prudential Corporation Asia Limited.
Under the GWS framework, the IA, as the group supervisor appointed to regulate and supervise an insurance group, has direct regulatory powers over the designated insurance holding company (DIHC), according to a statement by the regulator.
This move, it added, will allow the IA to carry out effective group-wide supervision over the entire insurance group.
The GWS framework, which came into effect on March 29, aligns Hong Kong's insurance regulatory regime with international standards and practices. The IA has issued the Guideline on Group Supervision, which spells out principles and standards for DIHCs on a wide range of areas including enterprise risk management, corporate governance, capital requirements and public disclosure.
The three designated insurance holding companies have all welcomed the development.
“We are very proud to be a Hong Kong-headquartered company and are committed to the long-term future of Hong Kong as an international financial centre and attractive home for insurance groups,” said Garth Jones, chief financial officer of AIA Group. “We welcome our designation under the GWS Framework, which further aligns Hong Kong’s insurance regulatory regime with global standards and further reinforces the continued health and strength of the local insurance industry.”
Meanwhile, FWD said that it has been planning for this for quite some time.
“Over the last few years, FWD has actively prepared for, and supported, the development of the group-wide supervision framework through continued dialogue with the Hong Kong Insurance Authority,” the company said in a statement. “We believe we are well positioned for a smooth transition to the new framework."
Prudential, in its statement, said that it has been engaging with the IA since it took over as group supervisor for Prudential in October 2019.
“We welcome the confirmation of our designation into the new Hong Kong group-wide supervision framework,” said Prudential group chief executive Mike Wells. “This new supervisory regime makes Hong Kong an even more attractive hub for regional and global insurers and reinforces HKIA’s role as a respected supervisor of international insurance groups.”