Hong Kong to study protected cell company legislation for marine insurance expansion
Financial Secretary Paul Chan announced plans to study legislation for a protected cell company structure to boost marine insurance, as five insurers' shipping risk pool now covers over 1,000 vessels. The government will also lower infrastructure investment requirements for insurers and promote insu
Hong Kong's Financial Secretary Paul Chan revealed on 13 November that the government is studying legislation to establish a "protected cell company" (PCC) structure, which would allow multiple transactions to be conducted within a single company while legally separating their respective assets and liabilities, simplifying arrangements and reducing setup costs.
Speaking at the Asia Insurance Forum, Chan said the insurance industry is expanding into marine insurance, noting that five insurers jointly launched a "shipping risk pool" last year to provide war and related risk coverage for Hong Kong and mainland Chinese shipowners, which has now underwritten more than 1,000 vessels. The government and the Insurance Authority will work with the industry to expand the risk pool's underwriting capacity.
Chan also said authorities will lower requirements for insurers investing in recognised infrastructure projects in Hong Kong and mainland China, with the change taking effect at the end of this year. This will help free up more resources to serve infrastructure projects such as the Northern New Territories development. He stressed that infrastructure investment requires long-term financing while insurers need investment assets, and the move can balance long-term commitments with protecting policyholders' interests.
Chan noted that the government is actively developing insurance-linked securities and will expand special-purpose insurance to support gold, green fuel and low-altitude economy development. He said geopolitical tensions are reshaping supply chains and trade patterns, while climate change, digital attacks and artificial intelligence are changing the insurance industry's underwriting scope and operational models, requiring the sector to enhance resilience and capabilities to meet emerging industry needs and manage risks.
Chan said Hong Kong's first five-year plan includes the insurance industry in its "Finance+" vision, aiming to leverage financial resources to support different economic sectors. He added that the China National Financial Regulatory Administration supports mainland insurers investing in Hong Kong-listed exchange-traded funds through the Stock Connect schemes, which will broaden mainland insurers' investment options and enhance Hong Kong capital market liquidity, providing a solid foundation for exploring new markets amid changing economic conditions.
