b'TABLE OF CONTENTSAmong other things, the MAS consideredAccording to a press release and conference dated establishing an alternative to the currentlyon January 7, 2022, the IA took over Target after implemented Global Industry Classificationfinding problems with its foreign currency trading Standard Methodology (GICSM). Under theinvestment strategy. In the press release, Mr. current GICSM, there is no classification forClement Cheung, the Chief Executive at the IA, government sector and its relating sub-sectors. Asstated that the IA had discovered the investment such, the MAS is amending the review process toactivities and asset allocation of Target might have one similar to the North American Industrybreached statutory requirement under the IO, and Classification System classification system, but atthere are serious deficiencies in its corporate the same time, considering other similar industrygovernance. As a result, the IA decided to exercise classification methods to better incorporate variousits power and appointed Deloitte as managers to sectors into its classification. take control of Targets affairs and assets to ensure The MAS is expecting to test the amended Noticeits normal operation for maintaining market stability 122 in early in the first quarter of 2023 and to beginand protecting the interest of policy holders.its implementation by the end of the second quarterFour insurers (namely, the Bank of China Group of 2023. A new data collection platform has beenInsurance, China Pacific Insurance (HK), China introduced as a replacement for the currentTaiping Insurance (HK) and CMB Wing Lung electronic returns submission system in order toInsurance) were appointed to step in and to offer accommodate the upcoming change. policies to taxi owners and drivers who faced being left without coverage by Target. Around 8,000 policies are involved, and currently, around 7,894 of Regulatory Investigations them are engaging with the four insurers to secure cover. During this transition, a 30-day grace period IAs Intervention in Target Insurance has been granted to make sure taxis have the benefit of cover even without completing the In a major development for the Hong Kong insurancetransitional process. This arrangement will allow industry, the IA has taken over Target Insuranceaffected taxis to continue operating with cover and (Target) by exercising its powers under sectionminimalizes the adverse impact on Hong Kongs 35(2)(b) of the Insurance Ordinance (Cap. 41) (IO).public transportation system.Section 35(2)(b) permits the IA to give a direction to appoint a person to be the Manager of an authorizedIAs AML investigations insurer, and have the Manager manage the affairs, business and property of the insurer. Target is a HongOn January 31, 2022, the IA ordered two life insurers Kong-based insurer that covers around 60% of theto pay a pecuniary penalty of HK$7 million for taxi insurance policies in the market. These policiescontravening certain provisions of the Anti-Money contributed to around 50% of the companysLaundering and Counter-Terrorist Financing premium income in its 2021 financial year. Ordinance (Cap. 615) (AMLO). MAYER BROWN |113'