The Insurance Authority (IA) used the Belt and Road Summit in September to pitch Hong Kong once more as an ideal captive and reinsurance domicile to support businesses on the China mainland to “go global”.
Followers of Asia’s captive market will be familiar with this line, but in reality only a handful of captives are domiciled in Hong Kong and progress in making the territory an attractive jurisdiction has been slow in the past 10 years.
“Under the current geopolitical environment, Hong Kong, as a special administrative region of China, is playing an increasingly significant role in the global financial and insurance market,” said Simon Lam, Executive Director of General Business of the IA.
“The establishment of captive insurance companies in Hong Kong has become a primary risk management solution for Mainland enterprises to actively manage their overseas projects’ risks. In the long run, these businesses will provide impetus to the insurance ecosystem in Hong Kong and reinforce our position as a global risk management centre and a regional (re)insurance hub.”
In March 2021 new legislation did expand the scope of insurable risks by captives and allowed further “preferential treatment” by the China Banking and Insurance Regulatory Commission (CBIRC) for Hong Kong qualified reinsurers under the China Risk Oriented Solvency System.