Hong Kong plans rules for insurers’ hot new growth market
The revised guidelines are expected to take effect in 2027.
Hong Kong is considering new rules for asset-intensive reinsurance, a rapidly growing segment of the insurance market, according to people familiar with the matter. The Hong Kong Insurance Authority has sought industry feedback on proposed changes, which will specifically target asset-intensive reinsurance for the first time. In basic terms, asset-intensive reinsurance involves insurers shifting responsibility for managing assets and liabilities to a third party, which can invest the funds to generate higher returns.
Reinsurers have gained importance as demand for private credit has increased, but this market has also caused concern due to its potential risks. Under the proposed rules, insurers would either inform the regulator about asset-intensive reinsurance contracts involving third parties, or seek approval depending on the scenario. The assessment criteria for approval will include factors such as credit rating, collateral, and legal enforceability.
The revised guideline is expected to come into effect in 2027. Recent transactions in Hong Kong include US$1 billion deals between Resolution Life, a reinsurer owned by Japan's Nippon Life Insurance, and HSBC Holdings’ life insurance arm, as well as Hang Seng Life. In 2025, Japan's financial regulator examined risks related to life insurers transferring policy liabilities to reinsurers backed by global investment firms.
Globally, the International Association of Insurance Supervisors has highlighted structural changes in the life insurance industry leading to risks associated with cross-border asset-intensive reinsurance transactions.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
