Insurance Ordinance

(1)
Subsections (2) and (3) apply to an authorized insurer that carries on long term
                business and that
is—
(a)
an HK insurer;
(b)
a designated insurer; or
(c)
a non-HK insurer in relation to which a permission under
section
                        22A(1)
is in effect.
(2)
The insurer must, in respect of its long term business, maintain a separate
                account and a separate fund for each of the following parts of that
business—
(a)
the part that is of a nature specified in class C in
Part 2 of
                        Schedule 1
;
(b)
the part that is of a nature specified in class G in
Part 2 of
                        Schedule 1
;
(c)
the part that is of a nature specified in class H in
Part 2 of
                        Schedule 1
;
(d)
the part that is specified business.
(3)
Also, the insurer must, within the fund maintained under subsection
(2
)(
d)
, maintain at least 1 separate account and 1 separate sub-fund
                for the part of the specified business that is participating business.
(4)
Subsections (5) and (6) apply to an authorized insurer that carries on long term
                business in or from Hong Kong and that satisfies all of the following
conditions—
(a)
the insurer is a non-HK insurer;
(b)
the insurer is not a designated insurer;
(c)
there is no permission under
section 22A(1)
that is in effect in
                    relation to the insurer;
(d)
there is no election under
section 22B(1)
that is in effect in
                    relation to the insurer.
(5)
The insurer must, in respect of its long term business carried on in or from
                Hong Kong, maintain a separate account and a separate fund for each of the following
                parts of that
business—
(a)
the part that is of a nature specified in class C in
Part 2 of
                        Schedule 1
(other than long term reinsurance business with offshore
                    risk);
(b)
the part that is of a nature specified in class G in
Part 2 of
                        Schedule 1
(other than long term reinsurance business with offshore
                    risk);
(c)
the part that is of a nature specified in class H in
Part 2 of
                        Schedule 1
(other than long term reinsurance business with offshore
                    risk);
(d)
the part that is specified business (other than long term reinsurance
                    business with offshore risk);
(e)
the part that is long term reinsurance business with offshore
                    risk.
(6)
Also, the insurer must, within the fund maintained under subsection
(5
)(
d)
, maintain at least 1 separate account and 1 separate sub-fund
                for the part of the specified business (other than long term reinsurance business
                with offshore risk) that is participating business.
(7)
Subsections (8) and (9) apply to a non-HK insurer in relation to which an
                election under
section 22B(1)
is in effect.
(8)
The insurer must, in respect of its long term business carried on in or from
                Hong Kong, maintain a separate account and a separate fund for each of the following
                parts of that
business—
(a)
the part that is of a nature specified in class C in
Part 2 of
                        Schedule 1
;
(b)
the part that is of a nature specified in class G in
Part 2 of
                        Schedule 1
;
(c)
the part that is of a nature specified in class H in
Part 2 of
                        Schedule 1
;
(d)
the part that is specified business.
(9)
Also, the insurer must, within the fund maintained under subsection
(8
)(
d)
, maintain at least 1 separate account and 1 separate sub-fund
                for the part of the specified business that is participating business.
(10)
An authorized insurer that fails to comply with this section commits an offence
                and is liable on
conviction—
(a)
to a fine of $1,000,000; and
(b)
in the case of a continuing offence—to a further fine of $20,000 for each
                    day during which the offence continues.
(11)
In this
section—
long term reinsurance
                    business with offshore risk
(
具離岸風險的長期再保險業務
) means any long term business that—
(a)
is reinsurance business; and
(b)
is not long term reinsurance business with onshore risk;
long term reinsurance
                    business with onshore risk
(
具在岸風險的長期再保險業務
) means—
(a)
any facultative reinsurance business, being long term business, under
                        which the risk ceded is underwritten in Hong Kong, that is to
say—
(i)
the policy is issued in Hong Kong;
(ii)
the proposal form, application form or any other form of a similar
                            nature is signed, submitted, received or accepted in Hong Kong;
                            or
(iii)
the risk is accepted in Hong Kong; or
(b)
any treaty reinsurance business, being long term business, in relation
                        to which the risk is underwritten in Hong Kong, that is to
say—
(i)
the treaty is signed or accepted in Hong Kong; or
(ii)
the treaty negotiation is concluded in Hong Kong,
excluding any treaty reinsurance business under which less than 25%
                        of the total risk ceded (determined in terms of the gross premiums) is
                        underwritten in Hong Kong as described in paragraph (a);
participating business
(
分紅業務
) means any long term business in relation to
                which a policy holder has a right to receive, at the discretion of the insurer, a
                financial benefit that is determined based on a profit-sharing mechanism as a share
                of the insurer’s profits in respect of the insurer’s business or a part of the
                insurer’s business;
specified business
(
指明業務
) means the business of a nature specified in
                class A, B, D, E, F or I in
Part 2 of Schedule 1
.