b'ILS and Convergence Markets TWO NEW AMENDMENTS TO HONG KONGSUnder the No. 2 Amendment Ordinance, the IA INSURANCE ORDINANCE GIVE MORE DETAILmay designate a Hong Kong-incorporated holding ON ILS REGIME AND SUPERVISION OFcompany (Designated Insurance Holding INSURANCE GROUPS Company) within an insurance group to be On July 24, 2020, Hong Kongs Legislative Councildirectly supervised by the IA as well as the scope of passed two bills amending the IO. the insurance group subject to its supervision. The IAs must give its prior approval before a person The first, the Insurance (Amendment) Ordinancemay become a shareholder controller, a chief 2020, sets out the ILS regime and provides a frame- executive, director or key person in control of work allowing issuance of ILS in Hong Kong throughfunctions of the Designated Insurance Holding a special purpose vehicle. See our May 2020 LegalCompany, including satisfying the IA that the Update for further discussion regarding the ILS scheme.person is fit and proper. The IA will have similar The second bill, the Insurance (Amendment) (No. 2)powers of inspection, investigation and disciplinary Ordinance (No. 2 Amendment Ordinance),powers against the Designated Insurance Holding enhances the regulatory framework for supervisionCompany as with authorized insurers. of insurance groups where the holding company isInsurers should consider how these two amend-incorporated in Hong Kong. Currently, the IA onlyment ordinances could impact their business as has direct supervision over an authorized insurerwell as regulation of their group. gbut not its related companies or the holding company if not authorized insurers. The No. 2 Amendment Ordinance amends the IO by enabling the IA to have supervision of the insurance group on a group-wide basis, bringing Hong Kong into line with international standards and practices.MAYER BROWN 51'