Each week we set out a list of new insurance regulatory developments relevant to the Asia-Pacific*, India and UK, new insurance-related case law in Hong Kong, Australia and England and interesting insurance articles and news reports from across the world.
Insurance regulatory updates
Hong Kong
The Insurance Authority (IA)
has published consultation conclusions on the Guideline on
Exercising Power to Impose Pecuniary Penalty in Respect of Regulated Persons
under the Insurance Ordinance (Cap. 41) (the “Guideline”).
Philippines
The Insurance Commission has issued a regulation
permitting insurance companies to invest in Real Estate Investment Trusts
Australia
ASIC has released Information Sheet 240 AFS licensing – Requirements for certain
applicants to provide further information to provide guidance
to applicants on recent changes to ASIC’s Australian financial services (AFS)
licensing assessment procedures. These changes apply to:
- applicants that are a body corporate;
- applicants that are Australian Prudential Regulation Authority-regulated bodies; and
- applicants that are proposing to offer certain financial services or to operate in specific circumstances,
and are required to provide additional information to ASIC.
United Kingdom
The Financial Conduct Authority Chair, Charles Randell,
has announced the appointments of new Chairs for the FCA’s independent
Practitioner Panel and Markets Practitioner Panel.
RBNZ accepts report of independent review of its handling of failed insurer
The Reserve Bank has released the review that it commissioned of its supervision of CBL Insurance Limited (CBL). The review relates to the Bank as regulator and supervisor of licensed insurers, and the Bank accepts all findings and recommendations for itself and the insurance regulatory regime.
The review’s key recommendations are that the Bank:
- Act decisively, making full use of the powers available to it when in doubt about a company’s financial soundness;
- Strengthen the governance obligations of insurers through greater scrutiny and accountability of boards, management and appointed actuaries;
- Increase resources to the supervisory team and the policy team to a level consistent with the Bank’s goals, priorities and risk appetite;
- Modify the Solvency Standard and, if necessary, seek to modify the Insurance (Prudential Supervision) Act 2010 to strengthen the capital management and solvency framework for licensed insurers.
International Association of Insurance Supervisors
IAIS Publishes Public Roadmap as Part of Commitments under its Stakeholder Engagement Plan
Insurance articles / news
Chubb announces new policy on coal underwriting and investment Chubb will no longer underwrite the construction and operation of new coal-fired plants or new risks for companies that generate more than 30% of their revenues from coal mining or energy production from coal. Insurance coverage for existing coal-plant risks that exceed this threshold will be phased out by 2022, and for utilities beginning in 2022. In addition, Chubb will not make new debt or equity investments in companies that generate more than 30% of revenues from thermal coal mining or energy production from coal.
Allianz Global Corporate & Specialty Pacific has decided to cease underwriting of long tail risks in Australia and close its operations in New Zealand with effect from 1 September this year, following a strategic review of the business.
Thailand’s Siam Commercial Bank (SCB) has agreed to sell its entire stake in SCB Life Assurance to Hong Kong-based FWD. The bank has also concurrently entered a long-term bancassurance partnership with the Asian insurance giant. FWD is owned by Richard Li, son of Hong Kong’s richest man Li Ka-shing. The insurer has been expanding aggressively over the past few years, with its purchase of MetLife Hong Kong a few days ago being the most recent in a string of acquisitions in the wildly lucrative region of Asia.
Japan’s Sumitomo Life has bought 25% of shares in Singapore Life for US$90 million.
Insurance cases
AIG Insurance Hong Kong Ltd v. Lynn Mcculloch and Another [2019] HKCFI 1649; HCMP 2216/2018 (3 July 2019) – a party is not entitled to found a claim on rights arising out of an insurance policy without also being bound by the dispute resolution provisions in the policy. The court ordered an anti-suit injunction to restrain court proceedings in the US in light of a HKIAC arbitration clause in the policy.
Xu v IAG New Zealand Limited [2019] NZSC 68 (3 July 2019) – Christchurch earthquake damage to a home, which was sold before the house was restored. NZ Supreme Court held that under a property policy, whilst it is possible to assign the right to be indemnified for property damage, it is not possible to assign the right under the policy to restore the home and be indemnified for the costs of doing so. Such rights are personal to the original policyholder and cannot be assigned.
*Hong Kong, Singapore, China, Malaysia, Vietnam, Thailand and Australia.