Mainland Chinese and Hong Kong authorities are working together to establish a special channel for cross-border sale of insurance products, using a model pioneered in the Stock Connect, according to Hong Kong Insurance Authority (IA) chairman Moses Cheng Mo-chi.
Mr Cheng said he and IA chief executive John Leung Chi-yan proposed the idea to the China Banking Insurance Regulatory Commission (CBIRC) during a meeting in May, according to a report in South China Morning Post.
Under the proposal, Hong Kong insurance companies would set up service centres in the Greater Bay Area, enabling mainland customers to settle renewal premiums and file claims for insurance products they already own
“If the experience is good, it could then be expanded into a full scale insurance connect scheme to allow mainlanders to buy policies from Hong Kong companies in the mainland while Hongkongers can also buy products from mainland insurers,” he said.
Mr Cheng said a lot of details would need to be worked out, including quotas and restrictions.
“The major concern of the CBIRC is how to control capital outflows. Any premium payments and compensation involve cross border fund flows. We need to figure how to make sure the fund flows do not breach China’s capital controls,” he said.
Launched in November 2014, Stock Connect allows investors in Hong Kong to trade shares on the Shanghai or Shenzhen market using their local brokers and clearing houses, and allows mainland investors to trade Hong Kog listed shares.