Charltons provides transactional and regulatory advice to insurance and reinsurance companies, insurance agents and brokers operating in the insurance sector, as well as financial service intermediaries, investment banking firms, hedge funds and other intermediaries that provide services to or do business with insurance companies. We have experience in a wide range of domestic and international insurance and reinsurance transactions, as well as related regulatory matters.
Our experience includes corporate and financing transactions for the insurance industry, such as M&A, joint ventures, corporate reorganisations and restructurings, and debt and equity financings. We also advise on regulatory issues, including applications to the Insurance Authority for authorisation to carry on insurance business in Hong Kong. We acted as Hong Kong legal adviser to the major shareholder of AIA, which raised more than HK$159 billion in its 2010 IPO. Charltons can also offer assistance on litigation, arbitration and insolvency matters.
Charltons provides an insightful and highly personalised service, supporting clients operating in the insurance sector on complex issues by providing them with high impact, smart and practical advice. We develop strong relationships with our clients, which gives us a deep understanding of key business issues in the insurance sector. We also advise clients on key developments in the regulatory framework for insurance companies carrying on business in Hong Kong, such as the proposed implementation of a new statutory licensing regime for insurance intermediaries and the establishment of the Independent Insurance Authority.
Charltons has experience in issues relating to Hong Kong insurance law and the regulatory framework for insurance companies.
The Hong Kong insurance market is a highly competitive market. According to the office of the Insurance Authority as at 31 December 2019, there were 165 authorised insurers, 95 of the authorised insurers are Hong Kong incorporated companies. Most common home jurisdictions for foreign insurance companies operating in Hong Kong are the United Kingdom and Bermuda, followed by the United States.
Among the 165 authorised insurers, 91 were pure general insurers, 53 were pure long-term insurers and the remaining 21 were composite insurers.
Long-term insurers are insurers engaged in the following classes of insurance:
life and annuity, marriage and birth, linked long term, permanent health, tontines, capital redemption, retirement scheme management category I, retirement scheme management category II and retirement scheme management category III.
General insurers are insurers engaged in following classes of insurance:
accident, sickness, land vehicles, railway rolling stock, aircraft, ships, goods in transit, fire and natural forces, damages to property, motor vehicle liability, aircraft liability, liability for ships, general liability, credit, suretyship, miscellaneous financial loss, and legal expenses.
Composite insurers are insurers engaged in both long-term insurance and general insurance businesses.
Insurance intermediaries and agents
As of 31 December 2019, Hong Kong has:
- 163 authorised insurers of which 91 were pure general insurers, 51 were pure long term insurers and the remaining 21 were composite insurers.
- 2,413 licensed insurance agencies, 82, 665 licensed individual insurance agents – person who holds himself out to advise on or arrange contracts of insurance in or from Hong Kong as an agent or subagent of one or more insurers
- 26,641 licensed technical representatives (agent). A licensed technical representative (agent) is an individual who holds a license to carry on regulated activities in one or more lines of business as an agent of any licensed insurance agency.
- 824 licensed insurance broker companies. Insurance brokers – persons who carries on the business of negotiating or arranging contracts of insurance in or from Hong Kong as the agent of the policy holder or potential policy holder or advising on matters related to insurance agents
- 9,840 licensed technical representatives (broker). A licensed technical representatives (broker) is an individual who has been granted a license to carry on regulated activities in one or more lines of business as an agent of any licensed insurance broker.
Current regulatory system
The statutory requirements relevant to Hong Kong insurance companies are set out in the Insurance Ordinance (the “Insurance Ordinance”) and its subsidiary regulations. The Hong Kong insurance regulator is the Insurance Authority (the “IA”) which is established pursuant to section 4AAA of the Insurance Ordinance.
The functions of the IA are inter alia to regulate and supervise the insurance industry for the promotion of the general stability of the insurance industry and the protection of existing and potential policy holders. The IA took over the responsibilities of the Office of the Commissioner of Insurance of Insurance and also the regulation of insurance intermediaries from the self-regulatory organisations. The IA is now responsible for the regulation of insurance intermediaries, issuing codes and guidelines, approving licences, and is responsible for investigations and enforcement.
Charltons has experience in issues relating to Hong Kong insurance law and the regulatory framework for insurance companies, and can provide regulatory advice.