Supervision and Control

Principal Legislation

Insurance in Hong Kong is regulated by the Insurance Companies Ordinance (Chapter 41), which came into effect on 30 June 1983. The legislation has been amended a number of times to deal with matters such as solvency margins, the valuation of assets, the regulation of intermediaries and the establishment of captive insurers.


The Hong Kong supervisor is the commissioner of insurance. The commissioner is head of the Office of the Commissioner of Insurance (OCI) and is appointed as the Insurance Authority (IA). The OCI is part of the Financial Services and Treasury Bureau of the Hong Kong government and was established on 8 June 1990.

Admitted / Non-admitted

The legal provisions setting out the requirement for insurers to be authorised are contained in Section 6(1) of the Insurance Companies Ordinance, which provides that, “No person shall carry on any class of insurance business in or from Hong Kong except-(a) a company authorised under section 8 to carry on that class of insurance business; (b) Lloyd’s; (c) an association of underwriters approved by the Insurance Authority”. With the exception of certain compulsory classes, the requirement for local authorisation does not prevent either policyholders or intermediaries from placing Hong Kong insurance business with non-admitted insurers abroad.

Compulsory Classes

  • Employees’ compensation (the only compulsory insurance relevant to the life and benefits market).
  • Motor third party bodily injury.
  • Third party bodily injury insurance for certificated local vessels and for vessels registered in the mainland and Macao entering Hong Kong territorial waters.
  • Civil aviation third party liability.
  • Professional indemnity for insurance brokers.
  • Professional indemnity for trustees of mandatory provident funds.
  • Fidelity insurance for “licence holding institutions” dealing in securities and futures contracts.
  • Building owners’ corporation third party liability insurance.

State Involvement

There are two state insurance companies.

Tariff Classes

There are no tariff classes.

Premium Taxes and Charges

There are no premium taxes or fire service charges payable by either insurers or policyholders.

Policy Language

The normal policy languages are English and Chinese.

Non-Life (P&C) Insurance Market
As at 30 September 2010 there were 168 authorised insurers in Hong Kong, of which 46 were life, 103 were non-life and 19 were composite. The non-life market comprises the branches and subsidiaries of multinational insurance groups, mainland Chinese companies, local bancassurers, health insurers, monoline credit, marine and mortgage guarantee insurers, Lloyd’s syndicates, underwriting agencies and family-owned domestic insurers. With such diversity of interests represented in such a small territory, market consolidation is virtually impossible, and market shares are unusually diffuse: in 2009, for example, the top insurer had a market share of only 7.9%, whilst the top five had a market share of only 30.5%.
Reinsurance Market
Hong Kong has a total of 18 professional reinsurers, though only 13 of these wrote any premiums in 2010. Reinsurance is also written by some of the large multinational direct insurers. Hong Kong reinsurers derive much of their business from the local insurance market. Because of a new recognition of Hong Kong’s cultural and geographical advantages as a “hub” for north Asia, increasing amounts of international inwards business are also being written in the territory. The main sources of inwards business are mainland China, Macao and Taiwan, though business is also sought from Japan, Korea and the rest of Asia.
Distribution Channel

The main distribution channel for personal lines and small commercial accounts is the traditional agency system.

Brokers control most of the large commercial accounts. The leading brokers are trying to increase their efficiency by placing their small business accounts on a panel underwriting basis or by setting up parallel agency companies.

Natural Hazards
The most serious natural hazard in Hong Kong is typhoon. The typhoon season runs from mid-May to early October, with September the most active month. The cyclonic rainfall associated with typhoons or tropical storms is the price cause of flooding, which occurs regularly.