Hong Kong is a free economy. Everyone is welcome to stay in HongKong and to buy an insurance policy, they have good products and wants to offer to the rest of the world, including people from mainland China. Chairman of Hong Kong’s Independent Insurance Authority (IIA) Moses Cheng, said he expects the administrator to discuss the issue with China once the IIA is fully up and operating next year. UnionPay is China’s largest bank card provider, toughened rules on how consumers can apply its debit and credit cards to purchase Hong Kong insurance products, raising concerns that insurers in the territory will see their income rise. Cheng was hopeful the UnionPay limits would not harm the business because there are many valid ways to buy products in the city, and Chinese would continue to be drawn to Hong Kong’s higher quality regulations.
The IIA was not yet in communication with China, the China Insurance Regulatory Commission, but would expect to discuss the issue later on. China has been stabilizing regulations for buying of insurance products by its citizens in Hong Kong amid fears that those investments are being used to transfer money overseas. New insurance premiums purchased by Chinese visitors to Hong Kong surged to HK$16.9 billion ($2.18 billion) in the second quarter, more than double the year-ago period, the latest available government data showed. Hong Kong’s HK$374 billion ($48 billion) insurance business is exhilarating for its biggest upset in three decades with the introduction of the new watchdog and a direct licensing regime for the city’s more than 93,000 insurance experts. The revamp will bring the city’s outmoded, light-touch insurance regime in line with international standards by allowing the IIA to operate independently from the government with full supervisory, investigation and disciplinary powers.
Currently, Hong Kong’s 161 authorized insurers are regulated by the government’s Office of the Commissioner of Insurance while brokers and agents are overseen by self-regulatory industry bodies that have no rule-making or enforcement powers. Board member on China Mobile and a prosecutor, Cheng who was appointed in December to manage the establishment of the IIA, said “the new watchdog expects to take over from the government early next year and that promoting the use of new technologies or fintech to improve products would be a top concern”.