Full legislation
s.13AE
Approval of key persons in control functions of certain authorized insurers
(1A)
This section does not apply to a special purpose insurer.
(Added
17 of 2020 s. 12
)
(1)
An authorized insurer which is not a captive insurer must not appoint an
individual as a key person in control functions of the insurer unless the Authority
has approved the appointment under subsection (2).
Note—
See also
section 95ZD
if the authorized insurer is also a
designated insurance holding company.
(Added
18 of 2020 s. 6
)
(2)
The Authority may approve the appointment of the individual as a key person in
control functions of the authorized
insurer—
(a)
on an application made by the
insurer; and
(Amended
20 of 2023 s. 14
)
(b)
on payment of a prescribed fee.
(3)
An application made under subsection
(2
)(
a)
must—
(a)
be in the specified form;
(b)
be accompanied by any information specified by the Authority; and
(c)
be served on the Authority.
(Replaced
20 of 2023 s. 14
)
(4)
The Authority must not approve the appointment of an individual as a key person
in control functions of the authorized insurer unless it is satisfied that the
individual is a fit and proper person to be so appointed.
(5)
After
deciding on the application, the Authority must give the
authorized insurer and the individual a notice in writing of the result of the application.
(Amended
20 of 2023 s. 14
)
(6)
If the application is rejected, the notice must include a statement of the
reasons for the rejection.
(6A)
If an individual is a key person in control functions of a
non-
HK insurer
immediately before the insurer is designated as a designated insurer under
section 3B(1)
—
(a)
the individual is taken to be appointed as a key person in control
functions of the designated insurer on the date of designation; and
(b)
the appointment under paragraph (a) is taken to be approved under
subsection (2) on the date of designation.
(Added
20 of 2023 s. 14
)
(6B)
If the Authority withdraws the designation of a designated insurer under
section 3B(2)
, and an individual is a key person in control functions
of the designated insurer immediately before the withdrawal takes
effect—
(a)
the individual is taken to be appointed as a key person in control
functions of the insurer (being a non-HK insurer other than a designated
insurer) on the date on which the withdrawal takes effect; and
(b)
the appointment under paragraph (a) is taken to be approved under
subsection (2) on the date on which the withdrawal takes effect.
(Added
20 of 2023 s. 14
)
(6C)
If an individual is a key person in control functions of a
non-
HK insurer
immediately before the date on which the
non-
HK insurer becomes a
re-
domiciled
insurer under
section 3BA(1)
—
(a)
the individual is taken to be appointed as a key person in control function
of the re-domiciled insurer on that date; and
(b)
the appointment under paragraph (a) is taken to be approved under
subsection (2) on that date.
(Added
14 of 2025 s. 126
)
(7)
Subject to subsection (9), the Authority may, by serving a notice in writing on
an authorized insurer and an individual, revoke the approval of the appointment of
the individual as a key person in control functions of the
insurer (given
under subsection (2) or taken to be given by virtue of subsection
(6A),
(6B) or
(6C))
if it appears to the Authority that the individual is not, or is no longer, a fit
and proper person to be so appointed.
(Amended
20 of 2023 s. 14
;
14 of 2025 s. 126
)
(8)
The authorized insurer must, by the date specified in the notice under
subsection (7), terminate the appointment of the individual as a key person in
control functions of the insurer.
(9)
Before serving the notice under subsection (7), the Authority must serve on the
authorized insurer and the individual a preliminary written notice
stating—
(a)
that the Authority is considering the service on the insurer of a notice
under that subsection because it appears to the Authority that the individual is
not, or is no longer, a fit and proper person to be appointed as a key person in
control functions of the insurer; and
(b)
that the insurer or the individual may, within 1 month after the date of
service of the preliminary
notice—
(i)
make written representations to the Authority; and
(ii)
if the insurer or the individual so requests, make oral representations
to a person appointed for the purpose by the Authority.
(10)
If representations are made under subsection (9), the Authority must take them
into consideration before serving a notice under subsection (7).
(11)
An authorized insurer which contravenes subsection (1) or (8) commits an offence
and is
liable—
(a)
to a fine of $200,000; and
(b)
in the case of a continuing offence, to a further fine of $2,000 for each
day during which the offence continues.
(12)
In this
section—
control function
(
管控職能
), in
relation to an authorized insurer, means any of the following functions that is
likely to enable the individual responsible for the performance of the function
to exercise a significant influence on the business carried on by the
insurer—
(a)
risk management function, which is a function to establish the
strategies, policies and procedures to manage different types of key risks
of the insurer;
(b)
financial control function, which is a function to oversee all
financial matters (including investments, accounting and financial
reporting) of the insurer;
(c)
compliance function, which is a function to establish and formulate the
standards, policies and procedures to ensure the compliance with legal and
regulatory requirements that are applicable to the insurer;
(d)
internal audit function, which is a function to establish and implement
an audit plan to examine and evaluate the adequacy and effectiveness of the
controls to manage risks of the insurer;
(e)
actuarial function, which is a function to evaluate and
monitor—
(i)
the technical provisions, premium and pricing strategies of the
insurer;
(ii)
the reserving and investment policies and reinsurance arrangements
of the insurer; and
(iii)
the policies and controls in respect of the insurer’s vulnerability
to fluctuations in risk exposures and distribution policies;
(f)
intermediary management function, which, for an authorized insurer that
enters into contracts of insurance through licensed insurance intermediaries
or accepts referral of insurance business from licensed insurance
intermediaries, is a function to establish and maintain internal control
measures
for—
(i)
administering the licensed insurance agencies and licensed
individual insurance agents appointed by the insurer in relation to the
regulated activities carried on by them;
(ii)
monitoring the compliance with this Ordinance by the licensed
insurance agencies and licensed individual insurance agents appointed by
the insurer; and
(iii)
ensuring that the arrangements by the licensed insurance
intermediaries for the insurance business referred to the insurer comply
with—
(A)
the requirements of this Ordinance; and
(B)
the requirements imposed by the Authority in any code or
guideline published under
section 95
or
133
;
(g)
any other function specified in a notice under subsection
(14);
key person in control functions
(
管控要員
)—
(a)
in relation to an
HK
insurer or designated insurer—means an individual
responsible for the performance of one or more of the control functions for
the insurer; or
(b)
in relation to
a
non-HK insurer (other than a designated insurer)—means an
individual responsible for the performance of one or more of the control
functions for the insurer in respect of so much of its insurance business as
is carried on within Hong Kong.
(Amended
20 of 2023 s. 14
)
(13)
For the purposes of the definition of
key person in control
functions
in subsection (12), it does not matter whether the individual
is solely responsible, or is jointly responsible with other key persons in control
functions of the authorized insurer, for the performance of the relevant
functions.
(14)
Subject to subsection (15), the Financial Secretary may, by notice published in
the Gazette, specify a function to be a control function under subsection
(12).
(15)
The Financial Secretary must not specify a function to be a control function
unless the Financial Secretary is satisfied that the function is likely to enable
the individual responsible for the performance of the function to exercise a
significant influence on the business carried on by an authorized insurer.