Hong Kong’s Insurance Authority (IA) is currently developing HK RBC, a risk-based capital regime that is consistent with core principles issued by the International Association of Insurance Supervisors (IAIS). Under this regime, the capital requirements of licensed insurers will be determined based on the level of risk faced by the insurer. Once in effect, HK RBC will significantly transform the current capital framework defined in the Hong Kong Insurance Ordinance (HKIO).
Similar to requirements globally (e.g. Solvency II and IAIS Insurance Capital Standards (ICS)), HK RBC is a three-pillar approach which covers:
With the rollout of the regime fast approaching, insurers should begin their preparations early. This new regulation will bring about large-scale changes to how organisations view and operate risk management functions, requiring material changes across insurance and business functions. Our RBC Roadmap provides a holistic view of the path towards implementation and the critical considerations along the way. Our roadmap views HK RBC as a transformation journey towards not only compliance, but also establishing value-creating risk management.
Design the risk management function of the future
Develop and update policies and strategies
Improve data flow and quality
Improve risk management processes
Develop reporting capabilities
Evolve and adapt
Digitise your risk management function