Segregation of Hong Kong assets - impacts Hong Kong designated policyholders
We are writing to policyholders that we classify as “Hong Kong designated policyholders” to inform them of changes that are happening as a result of our regulatory requirements in Hong Kong.
IMPACTS OUR SCHEMES SOLD IN HONG KONG: PREFERENCE, QUANTUM AND MOMENTUM (TOGETHER "RL360 HONG KONG ILAS")
Upcoming changes to policies
Under our Hong Kong regulatory obligations, details of any RL360 Hong Kong ILAS are reportable to the Insurance Authority of Hong Kong (the ”IA”). The principal function of the IA is to regulate and supervise the insurance industry for the promotion of the general stability of the insurance industry and for the protection of existing and potential policyholders.
The segregation of assets
In line with the changing regulatory landscape in Hong Kong, it will become a regulatory requirement for our company to separate the assets of our insurance business carried on in or from Hong Kong, from the assets of our insurance business carried on in or from other jurisdictions. The segregation of assets is a method commonly used to protect policyholder’s assets should a business become insolvent.
How we will carry this out
The range of investment options currently available to policyholders through the above RL360 ILAS are also available to non-Hong Kong policyholders. Therefore, to assist with internal accounting and segregation purposes we will be separating the investment options into two ranges. One will be exclusively for investment from our Hong Kong designated policyholders (the “Hong Kong investment options”) and one for investment from other jurisdictions. The Hong Kong investment options will be a replica of the current investment options under the RL360 Hong Kong ILAS, with the same names, investment objectives and charging structure. We will only accept investment into the Hong Kong investment options from Hong Kong designated policyholders.
Moreover, in order to segregate the assets, we will operate trading accounts and custody accounts with our safekeeping custodian, Citibank, specifically for the Hong Kong investment options.
What changes policyholders will see in their policy
The Hong Kong investment options will only become available on 16 October 2024.
In order to implement the asset segregation, on 16 October 2024 (the “Switch Date”), Hong Kong policyholders' current holding(s) will be switched, and any regular premium allocation redirected (where applicable), into the corresponding Hong Kong investment option(s). An equivalent unit allocation and value will be switched from their current holding(s) into the corresponding Hong Kong investment option(s) on their policy. This may take up to two working days to be visible on policies through the Online Service Centre.
Policyholders will not be disadvantaged by the switch of holding(s) into the corresponding Hong Kong investment option(s) and no charges will occur as a result of the switch.
Policyholders do not need to take any action as a result of this notification as the changes detailed above will happen automatically in their policy.
Our website currently contains funds marked with “#” which are not available to Hong Kong designated policyholders. From 16 October 2024, our fund centres applicable to each RL360 Hong Kong ILAS will be updated to indicate which funds are the Hong Kong investment options available to Hong Kong designated policyholders.
Policyholders and advisers have been contacted primarily by e-shot, with letters sent by post where we do not hold a valid email, and to those who prefer to receive letters by post. A sample communication can be found opposite.