China’s Nationwide Monetary Regulatory Administration (NFRA), the monetary trade regulatory company below the State Council of the Individuals’s Republic, is continuous to advertise Hong Kong as a venue for insurers and reinsurers to sponsor disaster bonds.
Talking at a convention in Hong Kong this week, Li Yunze, the Chairman of the Nationwide Monetary Regulatory Administration (NFRA), defined China’s ambition to see extra of its personal insurance coverage and reinsurance firms establishing worldwide department workplaces in Hong Kong.
He additionally highlighted ILS as a continued focus, asking re/insurers to look to the Particular Administrative Area as a location to sponsor disaster bonds and insurance-linked securities (ILS) out of.
“The Monetary Regulatory Bureau firmly helps Hong Kong in consolidating and enhancing its standing as a global monetary middle,” Li Yunze defined.
He went on to say that his regulatory organisation will “strongly help Hong Kong to consolidate and improve its distinctive standing and benefits below the “one nation, two methods” system, preserve monetary prosperity and stability in the long run, and obtain higher improvement within the strategy of integrating into the general nationwide improvement.”
A part of that is in serving to to make China’s monetary market and its contributors extra open and related with Hong Kong’s.
This contains encouraging Chinese language insurance coverage and reinsurance corporations to ascertain their regional abroad headquarters in Hong Kong, supporting the ambitions of Chinese language enterprises to “go international”.
China’s monetary regulator additionally needs to “assist construct Hong Kong’s worldwide threat administration middle,” with a part of this being the encouragement of its use for ILS issuance.
Li Yunze stated the NFRA will “Help extra mainland insurance coverage firms to difficulty disaster bonds in Hong Kong and help the accelerated improvement of Hong Kong’s worldwide reinsurance market.”
It’s additional encouraging statements from senior Chinese language leaders within the authorities and regulatory area, which ought to assist to advertise cat bonds and ILS, in addition to the actual fact Hong Kong has a creating marketplace for these devices.
As we’ve reported earlier than, China needs to strengthen its insurance coverage system, with a selected deal with combatting the impacts of climate and pure disasters . The State Council, a key ruling body, has cited catastrophe bonds as one measure they believe can assist.
It’s additionally notable that, just a few years again, credit risk charges for mainland China insurance and reinsurance company sponsors of catastrophe bonds issued through Hong Kong insurance-linked securities (ILS) structures were set at attractive levels.
In the meantime, Hong Kong’s regulator has stated its determination to develop the capital market disaster risk transfer facilities for local insurers and reinsurers, as well as for municipalities in China.
