Jurisdiction: Hong Kong

On 18 November 2011, Catlin Group Limited (Catlin) announced the formation of a strategic partnership with China Reinsurance (Group) Corporation (China Re), the biggest reinsurance company in China. 

On 13 December 2011, the eighth supplement (Supplement VIII) to the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and Mainland China was signed, marking the latest enhancement of economic and trade cooperation between Hong Kong and the Mainland. 

The New Rules officially took effect on 15 October 2011 and since then, all foreign individuals (unless exempted) working in the PRC must participate in the PRC Social Insurance System. The New Rules affect every foreign individual (non-Chinese national) who is in possession of an employment permit, which would include a permanent residence permit of foreigners, and is lawfully working for an entity registered in the PRC, including a PRC subsidiary or a representative office of a foreign company. 

On 25 June 2010 (“Effective Date“), the Hong Kong Securities and Futures Commission (“SFC“) promulgated the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products (“SFC Handbook“) under which all SFC-authorised funds and investment-linked assurance schemes are required to provide investors with a Product Key Facts Statement (“Product KFS“) and an offering document that satisfy a number of disclosure requirements as set out in the SFC Handbook. 

The China Insurance Regulatory Commission Shanghai Bureau recently announced strict regulations on sales of variable annuity (VA) insurance in Shanghai. According to the regulations, insurers are required to submit the following written materials at least 10 days before launching their VA products: sample insurance contracts, policies and promotional materials; insurance application forms; details of their distribution channels and documents containing risk assessments signed by the relevant client. 

The Financial Supervisory Commission of Taiwan is considering amending the present investment regulations to allow insurers to invest in yuan-denominated securities and bonds issued in Hong Kong, a further sign of improving cross-straits ties. 

Bank shares have been popular among Chinese insurers due to their low valuations and stable performance. In the second quarter of 2011, Ping An Insurance (Group) Company of China, Ltd (Ping An) increased its stake in Industrial and Commercial Bank of China Ltd. (ICBC) from 188mn to 1.798bn shares, and The People’s Insurance Company of China (Hong Kong) Ltd. (PICC) raised its holdings in Bank of China from 63.7mn to 197mn shares in 2011.