Regulatory Alerts2020-01-21
Added · Updated
BELR Rule 29(2) – Life Insurance Policy as Acceptable Security
The Banking (Capital) Rules establish criteria for accepting life insurance policies as security under Rule 29(2). Authorized institutions must ensure the policy is issued by a Hong Kong-authorized insurer with a minimum credit rating of BBB- from Standard & Poor’s or Fitch. The security value is determined by the lower of the surrender value or 75% of the cash value, or a more prudent internal valuation.
Annex Criteria for Life Insurance Policy Accepted as Security under BELR Rule 29(2) A life insurance policy is acceptable to a prudent banker if the following criteria are met: (i) the life insurance policy is written in or from Hong Kong by an authorized insurer in Hong Kong; (ii) the insurer or its holding company has a credit rating of at least BBB- from Standard & Poor’s Ratings or Fitch Ratings, or an equivalent rating from other credit agencies at the time the life insurance policy is accepted by the AI as security; and (iii) the value of the life insurance policy as security is measured at the lower of the surrender value or 75% of the cash value of the life insurance policy, or a more prudent internal valuation. .