Draft amendments of Articles 15 and 15-2 of “Regulations Governing Foreign Investments by Insurance Companies”
2021-03-09
FSC announces a draft amendment of Articles 15 and 15-2 of “Regulations Governing Foreign Investments by Insurance Companies” to allow the insurance companies to better manage their asset profolio related to premium from their foreign currency denominated policies and enhance insurance solicitation training and products information disclosure on the exchange rate risk for selling traditional foreign currency denominated policies
A growing demand for foreign currency insurance policies brings an incremental percentage of foreign currency premiums and makes it more challenge for our insurance companies to well manage their asset-liability allocation in aspects of currency risks, etc. as the current cap amount allowed in foreign-currency investments in accordance with the relevant laws and requirements may not enough to meet their need. Aimed at helping our insurance companies to better manage their business risks, FSC has reviewed the relevant regulation and a draft amendment of Articles 15 and 15-2 of “Regulations Governing Foreign Investments by Insurance Companies” is going to be issued recently for public consultation.The main amendments of “Regulations Governing Foreign Investments by Insurance Companies” include：
- As to the calculation formula about the amount to be excluded from the calculation of the limit on the total amount of foreign investment under Paragraph 2, Article 15-2, the current percentage of various reserves for non-investment-linked life insurance business will be increased from 35% to 40%.( Amended Article 15、Article 15-2 and Article 15-2 attachment)
- As to the deductible item, Islamic bonds will be clearly listed as a deduction of Excluded Foreign Investment Amount. (Amended Article 15-2)
In addition to the above-mentioned draft amendment, a comprehensive measures to urge our life insurance companies to enhance their market conduct behavior while facing the growing demand for their foreign-currency denominated non-investment-linked policies has been under debate. For that purpose, another draft amendment of “Required Qualification and Directions for Life Insurance Companies to Engage in Foreign-currency Denominated Non-investment-linked Life Insurance Business” has been reviewed and will also be issued in the near future for public consultation.
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Update：
2021-03-31