Regulatory Alerts2020-01-21
Added · Updated
BELR Rule 29(2) – Life Insurance Policy as Acceptable Security
The Hong Kong Monetary Authority clarifies that life insurance policies are acceptable security for employee financial facilities under the Banking (Exposure Limits) Rules only if specific criteria are met. This conditional acceptance aims to mitigate incentive problems and depositor risks while allowing Authorized Institutions flexibility in designing staff loan policies. The guidance distinguishes between grandfathered facilities granted before the letter's date and new or reviewed facilities, which must adhere to the annexed criteria.