b'Insurance Regulatory | AsiaThe proposed Service Centers will adopt a sharedincurred in specified hospitals rather than specific office model and the Hong Kong Federation ofdisease(s). This avoids any technical difficulties in Insurers will take the lead in leasing office space inclaims when a certain disease is defined differently each of these two cities for insurance companies oracross the border. insurance agencies to set up counters for theirUnder the 2020 Circular, the price of GBA Medical policyholders in the GBA. 2Shenzhen is regarded asInsurance Policies shall be priced in accordance the most likely candidate to be one of those.with health care actuarial data within the GBA, and The 2019 Circular indicated that three types ofthe insured amount can be increased appropriately insurance can be sold in the Service Centers. First,to match the levels in Hong Kong and Macau. insurance policies with no cash values, such asAccording to the actuarial data published by the cross-border automobile insurance and personalChina Association of Actuaries in 2020, the occur-accident insurance. Second, insurance policiesrence rate of critical illness in the GBA is lower than relating to the health of the policyholder, such asthat in all other areas in Mainland China in all age health insurance and critical illness insurance. Third,groups and both genders. In effect, it is expected insurance policies which qualify under Hong Kongthat the insurance rate of GBA Medical Insurance or Macau tax deduction policy, such as a VoluntaryPolicies would be lower. Health Insurance Scheme (VHIS) or a QualifyingAnother highlight of the 2020 Circular is that Deferred Annuity Policy (QDAP).Chinese insurers can collaborate with insurance or INCREASING COMPETITION third-party entities in Hong Kong and Macau for mutual assistance in the GBA. On one hand, Developing insurance products for the GBA isentities in Hong Kong and Macau can help quite complex given the difference in currency, taxMainland Chinese customers arrange medical and regulation between the Mainland China,treatment and handle claims directly in Hong Kong. Macau and Hong Kong. That said, on NovemberOn the other hand, Chinese insurers can assist 16, 2020, the CBIRC issued a circular authorizingcustomers of Hong Kong and Macau insurers with Chinese insurers to sell cross-border insurancearranging medical treatment and claims manage-policies within the GBA to Mainland Chinesement in Mainland China. customers (the 2020 Circular), 3with a particular focus on medical insurance.In effect, Mainland Chinese customers who reside in the Guangdong province no longer need to pur-The 2020 Circular highlights that Mainland insurerschase medical insurance in Hong Kong and Macau in can now sell medical insurance policies which coverorder to enjoy the benefit of cross-border medical medical expenses incurred in specified hospitalscoverage. Depending on specific insurance prod-within the GBA, both within and outside Mainlanducts, the insured amount of GBA Medical Insurance China (GBA Medical Insurance Policies). WithinPolicies may be lower than insurance policies offered Mainland China, it covers the entire Guangdongby Hong Kong or Macau insurers. However, it is province (rather than only the nine cities of thereported that Chinese insurers have been working to GBA), and outside Mainland China, it covers Hongincrease it to a level comparable with that of Hong Kong and Macau. It is important to note that theKong or Macau insurance policies. 4trigger of coverage is based on medical expenses 2 Source: South China Morning Post. 4 Please refer to the news report (Chinese only) at http://www.3 Please refer to the circular (Chinese only) at http://www.locpg.gov. locpg.gov.MAYER BROWN 85'