The Office of the Commissioner of Insurance (OCI) in Hong Kong issued a revised Guidance Note on the Corporate Governance of Authorised Insurers (Revised GN10) in October 2016. This replaces the Guidance Note on the Corporate Governance Code for Authorised Insurers (Existing GN10) which came into effect in September 2003. It sets out the minimum standard of corporate governance that the OCI expects of insurers authorised to carry on insurance business in and from Hong Kong, including the composition, role and responsibilities of the board; internal controls; and compliance with laws and regulations.
Revised GN10 will generally become effective on 1 January 2017. There is a one-year transitional period for the increased minimum number of independent non-executive directors (INEDs), remuneration requirements and establishment of a risk committee. The requirements relating to “key persons in control functions” (Key Persons), a concept familiar in other jurisdictions and to be introduced in Hong Kong under the Insurance Companies (Amendment) Ordinance (Amendment Ordinance) will necessarily not take effect until the relevant statutory provisions have commenced. Revised GN10 largely reflects the International Association of Insurance Supervisors’ (IAIS) Insurance Core Principles 7 and 8 on corporate governance and internal control systems and risk management frameworks, respectively.