How HK’s new RBC regime may affect reinsurers
The preferential treatment that reduces the cost of capital for Chinese insurers when they buy reinsurance in Hong Kong could change once the city adopts a new RBC regime.
Chinese insurers continue to enjoy a lower cost of capital when they buy reinsurance in Hong Kong but things may change once Hong Kong adopts a new risk-based capital (RBC) regime in two years' time.
The China Banking and Insurance Regulatory Commission (CBIRC) and the Insurance Authority in Hong Kong reached a consensus in July 2018 that under the China Risk Oriented Solvency System (C-Ross), the capital requirement on mainland insurers would be reduced when they ceded business t…
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