Hong Kong publishes special purpose insurer (SPI) application guidelines

Hong Kong publishes special purpose insurer (SPI) application guidelines

The Hong Kong Insurance Authority has actually today published standards related to its new insurance-linked securities (ILS) regulative structure in the Government Gazette, with information on applications to develop unique purpose insurers (SPI) in the domicile now finalised.Hong Kongs “Guideline on Application for Authorization to Carry On Special Purpose Business (GL 33)” is a thorough document that takes the completed legislation and turns it into something more functional, by making it appropriate to those aiming to apply to develop ILS structures in the Special Administrative Region (SAR).
Hong Kongs readiness for ILS is now complete and with its pilot ILS grant plan also offered, along with this guide for companies and supervisors that helps in using to run ILS structures there, it may only be a matter of time up until the very first deal emerges.
As we described earlier this week, Hong Kong has actually already had enquiries from potential sponsors and is engaging with the market, in the hopes of having a first catastrophe bond deal all set and completed this year.
Now Gazetted, which is the main Hong Kong Government publishing of legislative modifications, rules and guidance, these standards for applying for authorisation of an SPI to carry out ILS business in the nation will enter into impact on June 30th 2021, we comprehend.
The legislation was in fact finalised previously this year, with the Insurance Ordinance (Amendment) 2020 having entered into effect in March 2021, but the accessibility of the guide signals Hong Kongs ILS preparedness to authorise applications and ILS issues.
The standard file discusses the requirements for getting an SPI authorised, along with the fees payable, how SPIs can be re-used for several issues, how reinsurance and risk transfer contracts can be rolled forwards, the filing requirements an SPI owner will face, in addition to restrictions around the sale of ILS to specific financiers.
There is likewise a diagram of the authorisation process for an SPI, however does not detail an expected time-line, as this would be different in each case, depending on the intricacy and readiness of an issue.
Its expected that authorisation speeds will be similarly as fast as other ILS domiciles in Hong Kong, as competitiveness often comes down to relieve and speed of use, so this will be important as an ILS market develops there.
You can hear from the Hong Kong Insurance Authority at our upcoming ILS Asia 2021 virtual occasion. Please register now, totally free, to protect your place.

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