Hong Kong’s Insurance Authority (IA) has delegated its inspection and investigation powers over insurance-related businesses of banks and other financial institutions to the Hong Kong Monetary Authority (HKMA).
The agreement will take effect on September 23, the two regulatory bodies said in a joint statement.
According to the statement, the HKMA is responsible for supervising authorised institutions (AIs) in accordance with the Banking Ordinance. The IA, under the statutory regime, regulates insurance intermediaries and is in charge of granting of licences, setting regulatory requirements and conduct standards, conducting inspections and investigations, and imposing disciplinary sanctions. The delegation of powers was made to improve efficiency and to minimise possible regulatory overlap with regard to insurance-related businesses of AIs.
To strengthen cooperation and ensure regulatory consistency, the two regulators signed a memorandum of understanding, which contains the arrangements on supervision, complaint handling, and enforcement over insurance-related activities carried out by AIs.
“At present, the insurance intermediary businesses are carried on by over 40 AIs,” said Clement Cheung, chief executive officer of the IA. “Close collaboration between the IA and the Hong Kong Monetary Authority helps enhance efficiency and efficacy in regulating these institutions.”
“The delegation of inspection and investigation powers by the IA to the HKMA supports effective supervision of insurance-related activities carried on by AIs,” said Norman Chan, HKMA chief executive. “We look forward to continuing the close collaboration with the IA.”