Introduction

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This document outlines the Insurance (Valuation and Capital) Rules for Hong Kong. It details regulations for insurance company valuation of assets and liabilities, and establishes rules for calculating capital requirements, including different tiers of capital.

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Applicability

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The guideline applies to:

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• authorized insurers; and

• any company that makes an application under section 7 of the Ordinance for authorization.​

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The guideline does not apply to:

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• marine insurers, except to the extent provided in the Insurance (Marine Insurers and Captive Insurers) Rules;

• captive insurers, except to the extent provided in the Insurance (Marine Insurers and Captive Insurers) Rules;

• Lloyd’s, except to the extent provided in the Insurance (Lloyd’s) Rules; or

• special purpose insurers.

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Requirements​

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For the purpose of valuing its assets and liabilities, determining the capital resources that make up its capital base and calculating its capital requirements in accordance with these Rules, an applicable insurer which is an HK insurer or a designated insurer must consolidate its assets, liabilities and capital resources together with those of its subsidiaries, except for subsidiaries which are regulated financial entities.

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Effective Date​

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Insurance (Valuation and Capital) Rules come into operation on 1 July 2024, which is the day on which section 11 of the Insurance (Amendment) Ordinance 2023 (20 of 2023) comes into operation.