Charltons provides transactional and regulatory advice to insurance and reinsurance companies, insurance agents and brokers, 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 acted as Hong Kong legal adviser to the major shareholder of AIA, which raised more than HK$159 billion in its 2010 IPO. We also advise on regulatory issues, including applications to the Insurance Authority for authorisation to carry on insurance business in Hong Kong. Charltons can also offer assistance on litigation, arbitration and insolvency matters.
Charltons provides an insightful and highly personalised service, supporting insurance clients 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.
Current regulatory regime of the insurance industry
The Insurance Ordinance (Cap. 41 of the Laws of Hong Kong) (the “Ordinance”) is the principal legislation regulating the insurance industry in Hong Kong. The regulatory framework that is applicable to insurers and insurance intermediaries in Hong Kong is set out in the Ordinance.
The Ordinance introduced and established the Independent Insurance Authority (the “IA”), which replaced the Office of the Commissioner of Insurance. 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 Commission 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.
In addition to establishing the IA, the Ordinance also established two Industry Advisory Committees (the “Advisory Committees”); one for long term business and the other for general business.
Under the Ordinance, all persons carrying on “regulated activities” are required to be licensed by the IA. Regulated activities include the act of negotiating or arranging a contract of insurance, the act of inviting or inducing, or attempting to invite or induce, a person to enter into a contract of insurance, the act of inviting or inducing, or attempting to invite or induce, a person to make a material decision or the act of giving advice.
The Ordinance provides for five types of insurance intermediaries:
Licence for business entities
Licence for individuals
Insurance broker
i. licensed insurance broker companies
ii. licensed insurance agencies
Insurance agent
iii. licensed technical representatives (broker)
iv. licensed individual insurance agents
v. licensed technical representatives (agents)
The Ordinance which amended the Insurance Companies Ordinance was implemented in stages. The third and final stage was implemented on 23 September 2019.
Charltons is a Hong Kong law firm that can provide regulatory advice regarding insurance law, and assist with insurance and reinsurance transactions.
