MACAU SAR, CHINA Law and Practice Contributed by: Carlos Eduardo Coelho, MdME
without prior approval from the AMCM shall result in a prohibition on the use of the acquired voting rights as stipulated under the MIO. For Macau-incorporated insurers, certain modifica- tions shall be subject to prior approval from the Chief Executive, including alteration of the share capital, merger, amalgamations, division or any other form of transformation, by means of an executive order that will be published in the Macau Official Gazette. Despite the limited number of M&A transactions, there has been significant growth in the Macau insurance industry in recent years, especially due to the border restrictions between Hong Kong and Mainland Chi- na – although these are no longer in place. This has prompted a rapid increase in the business volume of life insurance written in Macau (following increased demand from Mainland residents). In addition, GBA opportunities (see 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance ) have been leading to more attention being paid to the Macau insurance market. Therefore, the Macau insur- ance market has increased its attraction among for- eign stakeholders who have been keen to establish a presence in the region. 5. Distribution 5.1 Distribution of Insurance and Reinsurance Products The sale and distribution of insurance products is a licensed activity that can only be carried out by author- ised insurance companies or by licensed insurance agents and brokers (“Macau licensed intermediaries”). In addition to marketing and sales activities, all activi- ties leading to the effecting or arranging of insurance contracts or insurance operations between policy- holders and insurance companies should be con- ducted by licensed insurance intermediaries only, and should be conducted and take place in Macau. Under the IIAO, the types of insurance intermediaries are classified as:
• insurance agents (individual or corporate) – an insurance agent is qualified as an entity (intermedi- ary) who acts in the name of and on behalf of one or more insurers, to carry out insurance intermedi- ary activities, such as providing consultation and assistance in the negotiation, conclusion, manage- ment and execution of insurance contracts and other contracts related to insurance business; • insurance brokers – an insurance broker is qualified as an entity (intermediary), organised as a corpo- rate entity, who acts in the name of and on behalf of policyholders, with the exclusive object of carry- ing on insurance intermediary business; and • insurance salesmen – an insurance salesman is qualified as an entity (intermediary) who is simul- taneously an employee of an insurance company, of a corporate insurance agent or of an insurance broker and who acts, while carrying on insurance intermediary business, in the name of and on behalf of any such entity. Bancassurance (when banks are licensed as corpo- rate insurance agents) and direct sales are distribution channels commonly used in Macau. The distribution of reinsurance products in Macau is not common as there is currently only one repre- sentative office of a foreign reinsurer established in Macau. Reinsurance contracts are normally entered into based on the internal relationships between the cedant insurer and the reinsurers. 6. Making an Insurance Contract 6.1 Obligations of the Insured and Insurer The policyholder is subject to information disclosure obligations regarding risk, and should completely and accurately disclose to the insurer all information relat- ed to the risk assessment or evaluation that is known or ought to be known by the policyholder, no later than the conclusion of the insurance contract. In particular, the policyholders must declare to the insurer, in a complete and unequivocal manner, all cir- cumstances known to them or that they reasonably should know of that may influence the assessment of risk, regardless of whether they are included in the
314 CHAMBERS.COM
Powered by FlippingBook