China encourages mainland insurers to promote disaster bonds in Hong Kong

China’s banking and insurance regulator launched a discover on Monday encouraging the gross sales of catastrophe bonds by mainland insurers in Hong Kong.

Mainland property and casualty insurance coverage corporations and reinsurance corporations can arrange special-purpose entities in Hong Kong to boost funds from bond gross sales, in line with a press release of the China Banking and Insurance Regulatory Commission (CBIRC).

The association may also help diversify insurers’ losses from pure disasters akin to earthquakes, floods and typhoons, it mentioned.

Devastating summer time floods within the populous province of Henan in central China this 12 months despatched a wake-up name for Chinese language authorities to hunt higher insurance coverage cowl in opposition to pure disasters.

The CBIRC mentioned in July that it could information insurers to extend funding in pure disasters insurances, enrich product choices, in addition to elevate public consciousness of dangers to let pure catastrophe insurance coverage play a better function in nationwide emergency response.