HKFI's Response to the 2021-22 Budget


In the 2021-22 Budget, the Financial Secretary of the Hong Kong SAR mentioned:-

  • “We are currently undertaking a series of legislative work to provide for half-rate profits tax concessions to eligible insurance businesses including marine insurance and specialty insurance; facilitate the issuance of insurance-linked securities (ILS) in Hong Kong; expand the scope of insurable risks of captive insurance companies; and enhance the group-wide supervision framework by the end of next month. We are also preparing for the implementation of a Risk-based Capital Regime for the insurance industry to replace the rule-based capital adequacy regime” (Section 84 of the Budget);

  • “I propose launching a two-year Pilot Insurance linked Securities Grant Scheme to attract insurance enterprises or organisations to issue ILS in Hong Kong. The amount of grant for each issuance will be capped at $12 million, depending on the maturity of the ILS” (Section 85 of the Budget);

  • “Having regard to the goal of achieving carbon neutrality before 2050, we will continue to promote the development of green and sustainable finance, encourage institutions to conduct relevant investment, financing and certification activities and attract top- notch institutions and talent to Hong Kong to provide the relevant services. We will join hands with the financial sector and relevant stakeholders to take forward the strategic plan announced end last year by the Green and Sustainable Finance Cross Agency Steering Group, thereby leveraging our role as an international financial centre to mobilise capital towards sustainable projects in the region and enhance Hong Kong's position as a green and sustainable finance hub in the region" (Section 73 of the Budget).

The Hong Kong Federation of Insurers (HKFI) welcomes the government’s move to build the city into an insurance and international risk management hub. The suggested measures would promote the development of the insurance industry in Hong Kong. In particular, the introduction of the Pilot Insurance linked Securities Grant Scheme will accelerate the expansion of insurance-linked securities business.

The HKFI also welcomes the initiatives on ‘Green and Sustainable Finance’ and is supportive of the strategic plan launched by the Green and Sustainable Finance Cross Agency Steering Group last year. In this regard, the HKFI has set up a dedicated task force to explore green insurance related topics from different aspects. The HKFI will maintain close collaboration with the Insurance Authority to help promote the development of green insurance and sustainable projects in the industry to help enhance Hong Kong's status as a green and sustainable financial hub in the region.