MACAU SAR, CHINA Law and Practice Contributed by: Carlos Eduardo Coelho, MdME
China Insurance Regulatory Commission, setting out a framework that enables the regulators in these juris- dictions to share information to facilitate the perfor- mance of their supervisory and monitoring functions relating to insurance fraud. In line with the Outline Development Plan for the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), several entities have issued guidance on sup- porting the development of the GBA through opening up the financial sector. Such guidance features initia- tives that enable insurers in Hong Kong and Macau to expand their business into the GBA Mainland market, including empowering Hong Kong and Macau insurers to establish servicing centres in GBA Mainland cities to facilitate after-sales services, thereby improving customer experience and efficiency. These services shall include renewals, policy servicing and claims. 2.2 Writing of Insurance and Reinsurance Insurers and reinsurers that intend to carry on insur- ance or reinsurance services in Macau on a regular basis must be authorised to do so before commenc- ing operations, and will operate on either the life or the non-life branch. Composite licences are not granted. Despite there being no limitations on Macau residents taking out insurance in a different jurisdiction, Macau-related insurance products provided by non-authorised insur- ance companies are not enforceable in Macau, with the only exception being as stipulated under Article 6 of the MIO. Insurers and reinsurers can carry on such business through Macau-incorporated subsidiaries or branches of foreign insurers. The main criteria that will be considered for granting the licence (for either Macau-incorporated subsidiar- ies or branches) are as follows: • the financial capability of the company, including the minimum capital requirement; • the suitability of the shareholders, directors and key managements; and • the adequacy of corporate governance and busi- ness plans.
In addition to the above, and in order to be permit- ted to establish a branch, a foreign insurer must be licensed and have been in operation for more than five years in its country or territory of origin, and will only be permitted to carry on the classes of insurance that it is licensed to operate in its home jurisdiction. Reinsurance The sale and distribution of reinsurance products in Macau is a licensed activity that can only be carried out by authorised reinsurance companies. There are no limitations on Macau licensed insurers reinsuring the risks of their insurance contracts to overseas licensed reinsurers, but this does not mean that a foreign reinsurer is able to do its business in Macau freely and directly. A reinsurance company may register in Macau by means of a local incorporated company or representa- tive office. The requirements are contained in the MIO and are similar to those for the incorporation of an insurance company (with some specificities). A representative office is an office that represents an insurer or a reinsurer whose head office is overseas, and is not permitted to conduct, directly and in its name, any operations that come within the scope of activity of such insurer or reinsurer. This means that representative offices are merely proxies of the rein- surers they represent, and their exclusive scope of business shall be to place the reinsurance contracts with the entities they represent. The representative offices may: • accept reinsurance contracts on behalf and for the account of the entities they represent; and • attend to the interests generated in Macau as a result of the accepted reinsurance contracts. The representative offices shall not be permitted to: • practise acts that transcend or contradict the actions listed above; • retain any portion of the premiums in respect of the reinsurance contracts placed with the entities they represent; or
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