Hong Kong Risk-Based Capital Implementation Guide

Introduced by the Hong Kong Insurance Authority (IA), the Hong Kong Risk Based Capital (HKRBC) regime aims at strengthening Hong Kong policyholders' protection by ensuring the regulatory capital requirements of insurers reflect their actual risk exposures and incentivizing improved risk management. Recognising the regional insurance hub role that Hong Kong plays, HKRBC is also the first regulation to ever apply to insurance groups headquartered or having operations in Hong Kong.

On 6th July 2023, the Legislative Council of Hong Kong Special Administration Region (HKSAR) passed the Insurance (Amendment) Bill 2023 which provides the legislative framework for the implementation of the HKRBC regime. HKRBC is targeted to be effective in the second half of 2024.

With the effective date approaching soon, all insurance companies in Hong Kong need to get ready. This requires reassessing the capital held in the business against the new requirements, introducing governance and controls on an insurer’s own risk and solvency assessment and ensuring actuarial and financial reporting processes are compliant with the new regulations. Doing all this may not be easy to achieve without help from insurance regulatory experts.

In this guide, we provide an update on the HKRBC regime developments and  Deloitte’s insights on the major HKRBC implementation challenges and solutions. Our guide zooms in on how insurers can materialize the business benefits of HKRBC beyond regulatory compliance through operationalization strategies.