MACAU SAR, CHINA Law and Practice Contributed by: Carlos Eduardo Coelho, MdME
1. Basis of Insurance and Reinsurance Law 1.1 Sources of Insurance and Reinsurance Law Insurance activities (including those of both insurance and reinsurance companies) are mainly regulated by the Macau Insurance Ordinance (MIO) (Decree-Law No 27/97/M, as amended by Law No 21/2020 and republished by Macau Chief Executive Dispatch No 229/2020). Financial activities and financial institutions in gen- eral are regulated by the Macau Financial System Act (FSA) (Law No 13/2023), the most recent updates of which came into force on 1 November 2023. Insur- ance, reinsurance and pension fund management activities fall within the scope of FSA regulation, which classifies such entities as “financial institutions”. Articles 962 to 1063 of the Macau Commercial Code provide the general legal framework applicable to insurance contracts. Private pension funds activities (which can also be pursued by life insurance companies) are regulated separately by the Legal Framework for Private Pen- sion Funds (Decree-Law No 6/99/M, as amended by Law No 10/2001 – hereinafter, the “Private Pension Funds Law”). Insurance intermediaries’ activities are mainly regulat- ed by the Insurance Intermediary Activities Ordinance (IIAO) Law No 15/2024. A number of general laws are relevant for insurance activities, such as the Consumer Protection Law (Law No 9/2021), the Standard Contractual Clauses Law (Law No 17/92/M) and the Data Protection Law (Law No 8/2005). The MIO, the FSA, the IIAO and the Private Pension Funds Law are further enhanced by a set of bind- ing instructions or regulatory guidelines issued by the regulator of the Macau financial sector, the Monetary Authority of Macau (AMCM), by way of notices or cir- culars.
Macau is a civil law jurisdiction, meaning that legal rules are codified under a set of legal statutes created by the legislature, rather than being based on previ- ous judicial decisions or precedents, as is the case in common law jurisdictions. Previous judicial decisions may be relevant for guidance purposes but are not legally binding, so they are not as relevant as they would be in a common law jurisdiction. 2. Regulation of Insurance and Reinsurance 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance Insurers, reinsurers and insurance intermediaries are regulated by the AMCM, which operates under the authority of the Macau Chief Executive. The Insur- ance Supervision Department within the AMCM is the dedicated unit for the insurance sector. The AMCM issues binding instructions or regulatory guidelines, by way of notices or circulars, to exercise its supervisory functions over the insurance industry in Macau. Under the MIO and the FSA, the AMCM is also vested with the following powers: • to promote and encourage insurers and reinsurers to adopt appropriate standards of conduct, and proper and prudent business practices; • to supervise compliance with the laws and regula- tions that regulate insurers and reinsurers and the functioning of the financial market; • to carry out (extraordinary) inspections of insurers and reinsurers; • to commence and conduct administrative infringe- ment proceedings, propose respective sanctions to the Chief Executive and effect the collection of fines; • to urge the suppression of practices that are incompatible with the nature of insurers and rein- surers, and the suppression of situations that are likely to affect the regular functioning of the mar- kets; and • to submit to the Chief Executive proposals of laws to regulate matters under its supervision. In 2014, the AMCM entered into a co-operation agree- ment with the Hong Kong Insurance Authority and the
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