changes in insurance regulation: china / hong kong ...€¦ · guangzhou, (iv) supporting qualified...
TRANSCRIPT
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia
July - December 2018
Contents
Changes in insurance regulation: China 1
Changes in insurance regulation: Hong Kong 10
Changes in insurance regulation: Singapore 15
Changes in insurance regulation: Indonesia 17
Key Contacts 19
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 1
July – December 2018
Subject Update Key date(s) Link
The
Guangzhou
Financial
Affairs Bureau
issued the
Opinion on
Expanding the
Opening-up of
the Financial
Market and
Improving the
Level of
Financial
Internationaliz
ation in
Guangzhou
(《关于广州扩大
金融对外开放提高
金融国际化水平的
实施意见》)
The Guangzhou Financial Affairs Bureau
has set out ten main objectives for opening
up the financial market and improving the
level of financial internalization, including,
amongst others, (i) relaxing the upper
limit on foreign shareholding ratio of
securities companies, fund management
companies, futures companies and life
insurance companies to 51%, with no limit
after three years; (ii) liberalizing the
business scope of foreign invested
insurance brokerage companies in
Guangzhou, (iii) abolishing the
requirement for a 2 year old representative
office before foreign invested insurance
companies can be established in
Guangzhou, (iv) supporting qualified
foreign investors to operate insurance
agency business and insurance assessment
business in Guangzhou; and (v) reducing
the minimum total assets requirement for
Hong Kong and Macau insurance
brokerage companies to set up wholly
owned insurance agency companies in
Guangzhou to no less than HKD500,000.
Release date:
30 August
2018
http://www.gzjr.go
v.cn/gzjr/tzgg/201
809/50e3eab7884
047498b0cc7e3bd
2b5f97.shtml
(Guangzhou
Finance Affairs
Bureau's official
notice in Chinese)
http://www.gdjrb.
gov.cn/index.php/
article/index/id/78
17.html
(Media report in
Chinese)
The Shanghai
People's
Government
promulgated
the Special
Administrative
Measures for
Cross-border
Trade in
Services in the
China
(Shanghai)
Pilot Free
Trade Zone
(Negative List)
(2018) (《中国
The Negative List has, for the first time,
affirmed the negative list model of
regulating trade in services and expressly
prohibited the illegal sale of overseas
insurance products.
Release date:
29
September
2018
http://www.shang
hai.gov.cn/nw2/nw
2314/nw2319/nw1
2344/u26aw57056.
html
(Shanghai
Government's
official notice in
Chinese)
http://www.shang
hai.gov.cn/nw2/nw
2314/nw2319/nw4
1893/nw42229/u2
1aw1343259.html
Changes in insurance regulation: China
2 Hogan Lovells
Subject Update Key date(s) Link
（上海）自由贸易
试验区跨境服务贸
易特别管理措施
（负面清单）
（2018 年）》)
(Shanghai
Government's
official
interpretation in
Chinese)
http://www.shang
hai.gov.cn/nw2/nw
2314/nw2319/nw1
2344/u26aw57058
.html
(Shanghai
Government's news
conference in
Chinese)
Online
Insurance
Business
Regulatory
Measures
(Draft) (《互联
网保险业务监管办
法（草稿）》)
The China Banking and Insurance
Regulatory Commission ("CBRC") has
been soliciting comments from the
industry on the Online Insurance Business
Regulatory Measures (Draft) (the “Draft
Measures”).
The main proposals in the Draft Measures
are as follows:
Further liberalization of the
business scope of online
insurance products: Insurance
companies may expand certain types of
insurance business, including but not
limited to term life insurance and
ordinary life insurance, household
contents insurance, and property
insurance business whose entire sales,
insurance and claim services can be
independently and completely realized
through the internet, to provinces,
autonomous regions and municipalities
where they have not set up any
branches.
Clearly defining the operating
Release date
of relevant
news: 22
October 2018
http://news.cnstoc
k.com/news,yw-
201810-
4286752.htm
http://news.stcn.c
om/2018/1020/14
594990.shtml
(Media report in
Chinese)
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 3
Subject Update Key date(s) Link
areas for specialized
intermediaries:
Insurance intermediaries’ online
insurance business would no longer be
limited to the provinces, autonomous
regions, municipalities and designated
cities where their branches are located,
but they must not carry out online
insurance business in areas where the
insurance companies they act for do not
provide corresponding insurance
services. Insurance assessors engaging
in online assessment business are
further not to be restricted by the
business areas of the insurance
companies that engage them.
Strict online regulation:
Among other measures, insurance
companies and insurance
intermediaries must maintain
consistency between their online and
offline businesses by establishing
uniform information disclosure
standards, and strengthening the
regulation of third-party network
platforms, strengthening self-media
administration, strictly prohibiting the
payment of commissions or disguised
payments of commissions to personnel
who have not been registered as
practitioners.
Notice on
Retrospective
Administration
in Relation to
the Regulation
of Online
Insurance
Sales Activities
(Draft for
Comments)
(《关于规范互联
On 6 July 2018l, the CBRC issued the
Notice on Retrospective Administration in
Relation to the Regulation of Online
Insurance Sales Activities (Draft for
Comments) (the "Draft for Comments"),
which intends to exercise retrospective
administration of online insurance sales
activities.
In particular, the Draft for Comments
Release date:
6 July 2018
http://news.cnstoc
k.com/news,yw-
201807-
4242807.htm
(Media report in
Chinese)
4 Hogan Lovells
Subject Update Key date(s) Link
网保险销售行为可
回溯管理有关事项
的通知（征求意见
稿）》)
provides that sales interface
administration (meaning the retention of
content information and historical
modification information about key sales
interfaces during the sales process, and
establishment of version management
mechanisms), and sales process records of
online insurance sales activities (meaning
the retention by insurers of client
insurance information, information about
operating platforms and operation
tracking information) shall be
retrospectively administered.
The CBRC
solicits public
comments on
the Insurance
Agents
Regulatory
Provisions
(Draft for
Comments)
(《保险代理人监
管规定（征求意见
稿）》)
The CBRC’s Insurance Agents Regulatory
Provisions (Draft for Comments) (the
"Draft for Comments") aims to
incorporate the regulatory provisions for
professional insurance agencies, partial
insurance agencies and individual
insurance agents into the same document,
and introduces the following changes:
1. Changes in the connotation of
insurance agents
Professional insurance agencies, partial
insurance agencies and individual
insurance agents now become parallel
concepts.
2. Formal introduction of the
definition of "independent
agents"
"Individual insurance agents" now refer
to persons who enter into agency
agreements with insurance companies
and engage in insurance agency
business. This includes team-based
individual insurance agents and
independent insurance agents who do
not rely on any teams.
3. Breach of fiduciary duties: Those
who have committed a serious breach
of fiduciary duties are not permitted to
Release date:
13 July 2018
http://bxjg.circ.gov
.cn/web/site0/tab5
168/info4113311.ht
m?bsh_bid=43798
02768
(CIRC's official
notice in Chinese)
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 5
Subject Update Key date(s) Link
enter the industry.
4. Threshold for professional
agencies: The registered capital
threshold for regional professional
agencies to be established is lowered to
RMB 10 million.
5. Entry threshold for senior
management of professional
agencies: Senior management of
professional agencies are now required
to pass regulatory exams.
6. Regulatory provisions for partial
insurance agencies: More detailed
regulations regarding partial insurance
agencies are now in place.
Insurance
Company
Solvency
Regulatory
Provisions –
Answer No. 1:
Default Risk
Factors of
Hong Kong
Reinsurance
Counterparties
during the
Transitional
Period under
the
Equivalence
Assessment
Framework
Agreement on
Solvency
Regulatory
Regime
("Answer No.
1") (《保险公司
偿付能力监管规则
——问题解答第 1
号：偿付能力监管
Answer No. 1 is one of the specific
implementing measures for the
Equivalence Assessment Framework
Agreement on Solvency Regulatory
Regime signed in May 2017 between the
China Insurance Regulatory Commission
and the Hong Kong Office of the
Commissioner of Insurance, and will be in
force for a one-year trial period from the
date of its promulgation.
Through Answer No.1, Mainland
insurance companies that cede business to
qualified reinsurers in Hong Kong will
benefit from a generally lower reinsurance
credit risk charge.
Release date:
17 July 2018
Effective
date: 2 July
2018
http://www.cbrc.g
ov.cn/chinese/new
ShouDoc/82DE9E
B67F914118B0AC4
4F6EF0EC8E7.ht
ml
(CBRC's official
notice in Chinese)
http://www.cbrc.g
ov.cn/chinese/new
ShouDoc/B9E1641
426774EBC8729E
B2736D32E4B.htm
l
(CBRC's
accompanying
notice in Chinese)
6 Hogan Lovells
Subject Update Key date(s) Link
等效框架协议过渡
期内的香港地区再
保险交易对手违约
风险因子》)
Circular on
Effectively
Strengthening
and Improving
Insurance
Services (《关于
切实加强和改进保
险服务的通知》)
Insurance companies and insurance
agencies are now required to strictly
regulate insurance sales activities,
effectively improve insurance claim
services, vigorously strengthen the
management of online insurance business,
and to proactively resolve conflicts and
disputes, in order to further improve
service quality and standards of the
insurance industry.
Release date:
8 August
2018
Effective
date: 18 July
2018
http://www.cbrc.g
ov.cn/chinese/new
ShouDoc/FB3C25C
A8F4C47B388F02
FA0989459C8.htm
l
(CBRC's official
notice in Chinese)
http://www.cbrc.g
ov.cn/chinese/new
ShouDoc/5606E9A
2C689490BB24E5
01CD53A79D7.htm
l
(CBRC's
accompanying
notice in Chinese)
Supreme
People's Court
Interpretation
on Several
Issues
concerning the
Application of
the "People's
Republic of
China
Insurance Law" (IV) (《最
高人民法院关于适
用<中华人民共和
国保险法>若干问
题的解释
（四）》)
On 1 August 2018, the Supreme People's
Court has clarified the application of law to
property insurance contracts, specifically
to (1) the relevant issues on the transfer of
the subject matter of insurance; (2) the
rights and obligations of contractual
parties; (3) the relevant issues on the
subrogation right in insurance; (4) the
relevant issues on liability insurance.
These clarifications came into force on 1
September 2018.
Release date:
1 August
2018
Effective
date: 1
September
2018
http://www.court.g
ov.cn/zixun-
xiangqing-
110571.html
(SPC's official
notice in Chinese)
http://www.court.g
ov.cn/zixun-
xiangqing-
110561.html
(SPC's news
conference in
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 7
Subject Update Key date(s) Link
Chinese)
Circular on
Matters
Relating to the
Establishment
of Specialized
Products by
Insurance
Asset
Management
Companies
(《关于保险资产
管理公司设立专项
产品有关事项的通
知》)
Through the Circular on Matters Relating
to the Establishment of Specialized
Products by Insurance Asset Management
Companies (CBRC Circular No. 65 of
2018) [transliteration: Yin Bao Jian Fa
[2018] No.65] (the "Circular"), the CBRC
has (amongst others):
Set the qualification requirements for
product managers to launch portfolio
insurance asset management products.
Clarified the investment scope of
specialized products (mainly including
stocks of listed companies, publicly
offered bonds and non-publicly offered
exchangeable bonds issued by listed
companies and their shareholders).
Supported insurers as institutional
investors to maintain the long-term
operational stability of listed
companies, and clarified the exit
arrangements and options for these
products to ensure smooth exits.
Formulated risk control measures for
specialized products, putting forward
specific requirements in terms of
special account management, lock-in
periods, the degree of investment
concentration, prior registration,
information disclosure, related
transactions and other matters.
Clarified that specialized products are
not included in calculating the
investment proportion of equity-type
assets of insurance companies.
Release date:
24 October
2018
http://www.cbrc.g
ov.cn/chinese/new
ShouDoc/DCD3ED
9C2B2A49ABB0EB
C90F311CA3C0.ht
ml
(CBRC's official
notice in Chinese)
http://www.cbrc.g
ov.cn/chinese/new
ShouDoc/17BAF23
FB17F4B88A153B
A9D0EB910C6.ht
ml
(CBRC's
accompanying
notice in Chinese)
The CBRC solicits comments on the Insurance Funds Equity Investment Administrative Measures
The CBRC has issued the Insurance Funds Equity Investment Administrative Measures (Draft for Comments) (the "Equity Investment Administrative Measures") for public comment. The Equity Investment Administrative Measures mainly focus on further relaxing
Release date: 26 October 2018
http://www.cbrc.gov.cn/chinese/newShouDoc/E32001BF85384F36A01E1B19A0EC14CD.html (CBRC's official notice in Chinese)
8 Hogan Lovells
Subject Update Key date(s) Link
(Draft for Comments)
(《保险资金投资
股权管理办法（征
求意见稿）》)
the qualification requirements for insurance companies to make equity investment, lifting the restrictions on the scope of equity investment made by insurance funds, and enhancing the capability of insurance funds to benefit the real economy through the "Negative Lists and Positive Guidance". In particular, the industry sectors which financial equity investment and major equity investment can be made are no longer restricted, but insurance companies must select industries and enterprise types independently and prudently, and adopt appropriate measures to strengthen their equity investment and risk control capabilities.
http://www.cbrc.gov.cn/chinese/newShouDoc/D35EEC2E55A540FC8C2DDCD5891EE10C.html (CBRC's accompanying notice in Chinese)
Circular on
Several
Measures to
Support the
Intensification
of Reform and
Innovation in
Pilot Free
Trade Zones (《关于支持自由
贸易试验区深化改
革创新若干措施的
通知》)
The State Council has issued the Circular
on Several Measures to Support the
Intensification of Reform and Innovation
in Pilot Free Trade Zones, to be
implemented by the CBRC and other
authorities. In particular, these measures
further simplify the administrative review
and approval process for insurer branches,
establish and improve the information
sharing platform for corporate demand for
insurance in the pilot free trade zones, and
support eligible Taiwan insurers to set up
insurance operating entities in the Fujian
Pilot Free Trade Zone.
Release date:
23 November
2018
Draft
completion
date: 7
November
2018
http://www.gov.cn
/zhengce/content/
2018-
11/23/content_534
2665.htm
(The State
Council's official
notice in Chinese)
Promulgation
of the People's
Republic of
China Foreign
Investment
Law (Draft)
(《中华人民共和
国外商投资法（草
案）》) (the
"Foreign
Investment
Law")
The Foreign Investment Law has been
published on the website of the National
People's Congress to solicit comments
from the public, and is expected to replace
the former "Three Foreign Investment
Laws" (i.e., the Sino-Foreign Equity Joint
Venture Law, Foreign Invested Enterprise
Law and Sino-Foreign Cooperative Joint
Venture Law), and to further expand
current opening up efforts.
Draft release
date: 26
December
2018
http://www.npc.go
v.cn/npc/xinwen/2
019-
03/09/content_20
79173.htm
(The National
People's Congress
of the People’s
Republic of China's
official notice in
Chinese)
The Shanghai The Shanghai Insurance Exchange has Release date: http://news.cnstoc
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 9
Subject Update Key date(s) Link
Insurance Exchange has launched the International Reinsurance Platform (上海
保交所国际再保险
平台)
been entrusted with administering China's reinsurance registration system, to assist regulatory authorities in strengthening market supervision. An international reinsurance platform has been launched, which is an important initiative for developing Shanghai into a reinsurance centre.
8 August 2018
k.com/news,bwkx-201808-4256325.htm (Media report in Chinese)
The Insurance
Association of
China has
promulgated
the General
Framework of
Guidelines on
Corporate
Governance in
the Insurance
Industry (《保
险业公司治理实务
指南总体框架》)
and three other
standards
The Insurance Association of China has
officially promulgated four standards for
corporate groups, which are the first
standards for group corporate governance
in the insurance industry. The Guidelines
on Corporate Governance in the
Insurance Industry is one of the series of
such standards. Twelve other new
standards, which cover topics such as
information disclosure and related
transactions, are currently being drafted
and will be released soon.
Release date:
28 August
2018
http://www.iachin
a.cn/art/2018/8/2
8/art_22_102936.
html
(Insurance
Association of
China's official
press release in
Chinese)
10 Hogan Lovells
July – December 2018
Subject Update Key date Link
Risk-based
capital regime
On 6 August 2018, the Insurance
Authority (the "HKIA") launched the
Second Quantitative Impact Study ("QIS
2") for the Development of the Risk-based
Capital ("RBC") Regime, so that the HKIA
could form a holistic view of the solvency
position of the industry by putting all
necessary elements in place in order to
formulate policy decision on the RBC
regime.
On 13 August 2018, the HKIA finalized the
remaining package of template and
technical specifications on matching
adjustment for insurers carrying on long
term business ("MA package") and
invited insurers to submit data as set out
in the MA package.
Release date:
13 August and
6 August 2018
Circular:
https://www.ia.or
g.hk/en/legislativ
e_framework/circ
ulars/reg_matter
s/files/cir_20180
813_2.pdf
Circular:
https://www.ia.or
g.hk/en/legislativ
e_framework/circ
ulars/reg_matter
s/files/cir_20180
806.pdf
Authorization
of first virtual
insurer under
Fast Track
On 20 December 2018 the HKIA
announced that it has granted the first
authorization of a new insurer owning and
operating solely digital distribution
channels under the Fast Track, marking a
significant milestone of insurtech
development in Hong Kong.
The Fast Track was introduced by the
HKIA in September 2017 as a dedicated
queue (i.e. an expedited and streamlined
process compared with other licence
applications) for newcomers seeking to
operate solely through digital channels.
Release date:
20 December
2018
Press release:
https://www.ia.or
g.hk/en/infocente
r/press_releases/
20181220.html
Consultation
on proposed
guidelines on
(i) “Fit and
Proper”
criteria and (ii)
Continuing
Professional
Development
requirements
On 28 September 2018 the HKIA launched
a two-month public consultation on drafts
of the (i) Guideline on “Fit and Proper”
Criteria for Licensed Insurance
Intermediaries under the Insurance
Ordinance (Cap. 41) (the "F&P
Guideline"), and (ii) Guideline on
Continuing Professional Development for
Licensed Insurance Intermediaries (the
"CPD Guideline") in preparation for
Release date:
28 September
2018
Press release:
https://www.ia.or
g.hk/en/infocente
r/press_releases/
20180928_1.html
Consultation
Paper:
https://ia.org.hk/
en/infocenter/co
Changes in insurance regulation: Hong Kong
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 11
for licensed
insurance
intermediaries
commencement of the new regulatory
regime for insurance intermediaries.
It is planned that on 23 September 2019,
the HKIA will take over the regulation of
insurance intermediaries from the three
Self-Regulatory Organisations. Under the
new regime, a person will require a licence
granted by the HKIA to carry on regulated
activities. A person must be fit and proper
in order to be licensed and this
requirement is ongoing.
The draft F&P Guideline outlines the key
criteria and matters that the HKIA will
normally consider in determining whether
a person is fit and proper. These criteria
can be broadly grouped into three
categories:
(1) education, qualifications or experience
of the person;
(2) reputation, character, reliability and
integrity of the person; and
(3) the person’s financial status or
solvency.
The draft CPD Guideline aims to
standardise, modernise and update
existing CPD requirements applicable to
insurance intermediaries in line with new
statutory requirements.
nsultation_newre
gulatoryregime.ht
ml
Consultation
on proposed
guideline on
pecuniary
penalties for
licensed
insurance
intermediaries
On 26 October 2018 the HKIA launched a
two-month public consultation on the
draft Guideline on Exercising Power to
Impose Pecuniary Penalty in respect of
Regulated Persons under the Insurance
Ordinance (Cap. 41) (the "Penalty
Guideline").
This consultation forms part of the HKIA’s
preparation for the commencement of the
new regulatory regime for insurance
intermediaries starting from 23 September
2019 under which the HKIA will start
direct regulation of insurance
intermediaries.
Release date:
26 October
2018
Press release:
https://www.ia.or
g.hk/en/infocente
r/press_releases/
20181026.html
Consultation
Paper:
https://www.ia.or
g.hk/en/infocente
r/consultation_p
ecuniarypenalty.h
tml
12 Hogan Lovells
The draft Penalty Guideline suggests that
the penalty should be effective,
proportionate and fair. The HKIA will
consider all circumstances of the case and
take into account a number of factors
including the nature, seriousness and
impact of the conduct, behaviour of the
person since the conduct was identified,
and disciplinary record and compliance
history of the person. The financial
resources of the regulated person is also a
factor the HKIA proposes to consider in
determining whether to impose pecuniary
penalty on the regulated person and the
penalty amount.
The Penalty Guideline will take effect upon
commencement of regulation of insurance
intermediaries by the HKIA.
Consultation
on the
maximum
number of
insurers to be
represented by
a licensed
individual
agent or agency
On 31 October 2018 the HKIA launched a
two-month public consultation on the
draft Insurance (Maximum Number of
Authorized Insurers) Rules (the
"Maximum AI Rules"), which stipulate
a cap on the number of insurers by which a
licensed individual insurance agent or
insurance agency may be appointed under
the new statutory licensing regime for
insurance intermediaries. The regime is
scheduled for implementation in mid-
2019.
The draft Maximum AI Rules largely
mirror the existing framework set out in
the Code of Practice for the Administration
of Insurance Agents issued by The Hong
Kong Federation of Insurers. The HKIA
proposes increasing the maximum number
of insurers which a licensed individual
insurance agent or insurance agency can
represent from four to five, while keeping
the existing sub-cap on the number of long
term insurers (i.e. life insurers) at two. The
HKIA further suggests that there should be
no substantive change to the way the
number of appointing insurers is counted.
Release date:
31 October
2018
Press release:
https://www.ia.or
g.hk/en/infocente
r/press_releases/
20181031.html
Consultation
Paper:
https://ia.org.hk/
en/infocenter/co
nsultation_max_
authorizedinsurer
s.html
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 13
Consultation
on the financial
and other
requirements
for licensed
insurance
broker
companies
On 23 November 2018 the HKIA launched
a two-month public consultation on the
draft Insurance (Financial and Other
Requirements for Licensed Insurance
Broker Companies) Rules (the "Broker
Rules") under the new regulatory regime
for insurance intermediaries.
The draft Broker Rules are mainly
modelled on the relevant requirements for
insurance brokers set out in the Guideline
on Minimum Requirements for Insurance
Brokers issued by the HKIA. The draft
Rules set out the requirements in relation
to (i) paid-up capital and net assets, (ii)
professional indemnity insurance ("PII"),
(iii) keeping of separate client accounts,
(iv) keeping of proper books and accounts
and (v) submission of audit and related
information.
The major proposals include raising the
minimum amounts of paid-up capital and
net assets of an insurance broker company
(from HK$100,000 to HK$500,000) and
the amount of minimum indemnity limit
(from HK$3 million to HK$5 million) for
its PII.
Release date:
23 November
2018
Press release:
https://www.ia.or
g.hk/en/infocente
r/press_releases/
20181123.html
Consultation
Paper:
https://ia.org.hk/
en/infocenter/co
nsultation_financ
ial_requirements
_for_broker_com
panies.html
HKIA
welcomes
initiatives
announced in
Policy Address
to facilitate
development of
insurance
industry
On 10 October 2018 the HKIA welcomed
the initiatives to facilitate the development
of the insurance industry announced in the
Chief Executive’s 2018 Policy Address on
10 October 2018. The initiatives include
introducing legislative amendments to
allow for the formation of special purpose
vehicles specifically for issuing insurance-
linked securities, and tax reliefs to
promote the development of marine
insurance and the underwriting of
specialty risks in Hong Kong.
Apart from facilitating market
development, the HKIA also attaches great
importance to enhancing professional and
ethical standards of insurance
intermediaries. The HKIA welcomes the
launch of the Ethics Promotion Campaign
Release date:
10 October
2018
Press release:
https://www.ia.or
g.hk/en/infocente
r/press_releases/
20181010.html
14 Hogan Lovells
for insurance intermediaries by the
Independent Commission Against
Corruption as set out in the policy agenda.
Meanwhile, the HKIA is consulting the
public on the codes and guidelines for the
regulation of insurance intermediaries
under the statutory licensing regime to be
implemented in mid-2019.
HKIA and
Office of
Insurance
Commission of
Thailand sign
Memorandum
of
Understanding
On 12 December 2018 the HKIA
announced that it had entered into a
Memorandum of Understanding with the
Office of Insurance Commission of
Thailand to provide for mutual assistance
in insurance regulation.
Release date:
12 December
2018
Press release:
https://www.ia.or
g.hk/en/infocente
r/press_releases/
20181212_1.html
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 15
July - December 2018
Subject Update Key dates Links
MAS
Circular
No. ID
08/18
Approval of
External
Auditors
Every licensed insurer, other than captive
insurers and marine mutual insurers, shall
appoint an auditor annually, who must be pre-
approved by Monetary Authority of Singapore
(“MAS”) under section 36(6) of the Insurance
Act (Cap. 142) (the “Act”).
The circular has revised the requisite
application forms for the appointment of
auditors which must be submitted no later
than one month before the proposed date of
the auditor’s appointment, cancelling circular
No. ID 26/13 with immediate effect.
Effective date:
16 August
2018
Circular No. ID
08/18
http://www.mas
.gov.sg/~/media
/resource/legisl
ation_guideline
s/insurance/circ
ulars/ID08_18.
MAS
Circular
No. ID
12/18 –
Submission
of Annual
Returns
MAS has clarified that prior approval from the
Chief Executive and/or Board is required
before the insurer submits the electronic
returns to MAS. MAS has also reminded
insurers to put in place appropriate governance
processes to ensure that the electronic returns
are approved by their Chief Executive and
Board before submission to the MAS.
Issue date: 7
November
2018
Circular No. ID
12/18
http://www.mas
.gov.sg/~/media
/resource/legisl
ation_guideline
s/insurance/circ
ulars/ID12_18.p
df
MAS
Circular
No. ID
11/18
Review of
Insurance
Returns
MAS Circular No. ID 14/18 – Review of Insurance Returns and Amendments to Insurance (Valuation
The MAS has issued the following regulations
to remove the existing reporting requirements
of licensed insurers in the subsidiary
legislations:
(a) Insurance (Accounts and Statements)
Regulations 2018;
(b) Insurance (General Provisions and
Exemptions for Captive Insurers) Regulations
2018;
(c) Insurance (Financial Guarantee Insurance)
(Amendment) Regulations 2018;
(d) Insurance (General Provisions and
Exemptions for Marine Mutual Insurers)
Regulations 2018; and
(e) Insurance (General Provisions and
Exemptions for Special Purpose Reinsurance
Vehicles) Regulations 2018.
Issue Date: 28
September
2018 and 19
December
2018
Effective Date:
1 January 2019
MAS Circular
No. ID 11/18
http://www.mas
.gov.sg/~/media
/resource/legisl
ation_guideline
s/insurance/circ
ulars/ID11_18.p
df
Consultation
Paper
http://www.mas
.gov.sg/~/media
/resource/publi
cations/consult
_papers/2014/C
onsultation%20
on%20Review%
Changes in insurance regulation: Singapore
16 Hogan Lovells
and Capital) Regulations 2004
Arising from these amendments, MAS has also
amended the following regulations and notices
to effect the necessary consequential
amendments:
(a) Insurance (Valuation and Capital)
Regulations 2004;
(b) Insurance (General Provisions)
Regulations;
(c) Insurance (Intermediaries) Regulations (Rg
16);
(d) Insurance (Corporate Governance)
Regulations 2013;
(e) Monetary Authority of Singapore (Dispute
Resolution Schemes) Regulations 2007;
(f) MAS Notice 121;
(g) MAS Notice 124;
(h) MAS Notice 129;
(i) MAS Notice 130;
(j) MAS Notice 212; and
(k) MAS Notice 319.
Policy liabilities were previously reported net
of reinsurance in the insurance returns. For
the revised insurance returns under MAS
Notices 129, 130, 131 and 212, the reinsurers’
share of policy liabilities should be reported
separately from policy liabilities (gross of
reinsurance). To give effect to this, the
Insurance (Valuation and Capital) Regulations
2004 has been amended to set out valuation
rules for policy liabilities (gross of reinsurance)
and reinsurers’ share of policy liabilities. MAS
highlighted that there is no change in the
policy intent for the valuation of policy
liabilities (net of reinsurance) (i.e. policy
liabilities (gross of reinsurance) less reinsurers’
share of policy liabilities) and the calculation of
risk requirements arising from this change.
20of%20Insura
nce%20Returns
%202014.pdf
MAS Feedback
Response
http://www.mas
.gov.sg/~/media
/resource/publi
cations/consult
_papers/2014/
Response%20to
%20Consultatio
n%20on%20Ins
urance%20Retu
rns.pdf
Circular No. ID
14/18
http://www.mas
.gov.sg/~/media
/resource/legisl
ation_guideline
s/insurance/circ
ulars/ID14_18.p
df
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 17
July – December 2018
Subject Update Key Date Link
Liquidation Interim Balance Sheet
On 29 November 2018, the OJK issued Circular Letter No. 16/SEOJK.05/2018 of 2018, to provide guidance on preparing liquidation interim balance sheet of insurance, sharia insurance, reinsurance and sharia reinsurance companies. Based on the circular letter, the team dealing with the liquidation of an insurance company must prepare a liquidation interim balance sheet ("Liquidation Balance Sheet") in accordance with guidance issued by the OJK. All members of the liquidation team must sign the Liquidation Balance Sheet before they submit the documents to the OJK, which should also be approved by the OJK in terms of compliance with OJK guidance.
Effective on 29 November 2018
https://www.ojk.go.id/id/regulasi/Pages/Pedoman-Penyusunan-Neraca-Sementara-Likuidasi-Perusahaan-Asuransi,-Asuransi-Syariah,-Reasuransi,-dan-Reasuransi-Syariah.aspx
Insurance
Product
Marketing
To implement OJK Regulation No.
23/POJK.05/2015 on Insurance Product
and Insurance Product Marketing, the OJK
intends to issue a circular letter regulating
marketing activities of insurance products,
and has issued a draft letter.
Based on the draft letter, insurance
companies are only allowed to market their
products through the following channels:
a) direct marketing;
b) insurance agent;
c) bancassurance; and/or
d) non-bank business entities.
Plans of marketing channels that will be
used must be included in the business plans,
and marketing activities through channels
(b) – (d) above must be carried out based on
cooperation agreements.
The OJK can also order an insurance
company to stop its cooperation with third
Draft issued on
22 November
2018
https://www.ojk
.go.id/id/regula
si/otoritas-jasa-
keuangan/ranca
ngan-
regulasi/Pages/
Permintaan-
Tanggapan-
Masyarakat-
atas-RSEOJK-
tentang-
Saluran-
Pemasaran-
Produk-
Asuransi.aspx
Changes in insurance regulation: Indonesia
18 Hogan Lovells
Subject Update Key Date Link
party in certain circumstances.
Business Plan
for Non-Bank
Financial
Institutions
On 16 October 2018, the OJK issued a draft
regulation with respect to the business plan
of non-bank financial institutions (including
insurance companies).
Under the draft, all financial service entities
are required to prepare business plans
comprising of short term (one year),
medium term (three years), and long term
(five years) business plans, and other
relevant business plans/strategies.
The business plan must be submitted to the
OJK at the latest on 30 November of the
year before the year that the plan is
implemented. The OJK may also require the
companies to give presentations or to adjust
the business plans.
Furthermore, non-bank financial
institutions are required to report
implementation and supervision of
theirbusiness plan every 6 months to the
OJK.
Draft issued on
16 October
2018
https://www.ojk
.go.id/id/regula
si/otoritas-jasa-
keuangan/ranca
ngan-
regulasi/Pages/
Permintaan-
Tanggapan-
Masyarakat-
atas-RPOJK-
tentang-
Rencana-Bisnis-
Lembaga-Jasa-
Keuangan-
NonBank.aspx
Changes in insurance regulation: China / Hong Kong / Singapore / Indonesia 19
Hong Kong
Tim Fletcher
Partner, Hong Kong
T +852 2840 5011
Sherry Xiao
Senior Associate, Hong Kong
T +852 2840 5643
China Singapore
Liang Xu
Partner, Beijing
T +86 10 6582 9577
Stephanie Keen
Office Managing Partner, Singapore
T +65 6302 2553
Indonesia
Anthony Woolley
Administrative Counsel, Jakarta
T +61 21 2788 7921
Maraya Novarazka
Associate, Jakarta
T +61 21 2788 7900
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