MACAU SAR, CHINA Law and Practice Contributed by: Carlos Eduardo Coelho, MdME
10. Insurtech 10.1 Insurtech Developments
Macau Arbitration Center, and aims to provide more channels for resolving financial consumption disputes, including insurance disputes. Members of this scheme should first adopt the medi- ation services provided by the World Trade Center Macau Arbitration Center to resolve any financial con- sumption disputes that are within the scope of the scheme. The same procedure is applicable to consumer con- tracts and reinsurance contracts. 9.8 Penalties for Late Payment of Claims The Macau Commercial Code specifically states that compensation corresponding to double the default interest rate shall be added to the amount due if the insurer fails to pay the claims, for reasons imputable to the insurer, within 60 days from its acknowledgement of the incident, situation and consequence. 9.9 Insurers’ Rights of Subrogation Subrogation of the insurers’ rights in the position of the insured are typically stipulated as contractual terms. As a general legal principle, an insurer who has paid compensation is subrogated in the rights of the insured against liable third parties, up to the amount of such compensation. Nevertheless, the following specific limitations are stipulated under the Macau Commercial Code: • for damage insurance, except for wilful conduct, subrogation shall not be admissible if the damage or loss is caused by the insured’s descendants, ascendants, adoptees, lineal relatives by marriage, domestic servants or any other persons living with the insured in a common economy; and • for life insurance, the insurer cannot subrogate itself in the rights of the insured arising from the incident against third parties, with exceptions for medical and hospital expenses paid by the insurer in case of an accident caused by a third party.
While there is still plenty of room for insurtech devel- opments in Macau, there have been recent develop- ments with the enactment of the FSA, which intro- duced a legal framework for the AMCM to grant temporary licences that allow qualified entities to carry out fintech/insurtech projects on an experimental basis, as long as the risks involved are within control- lable parameters. Qualified entities include: • academic or scientific research and development institutions; • entities engaged in technological business; and • financial institutions (including insurers, reinsurers and pension fund management companies) that conduct financial innovation projects outside the scope of their licensed businesses. There are a few limitations for insurtech development in the market, such as regulatory requirements for non- Macau residents (especially for Mainland China cus- tomers), for all policy documents to be signed within the Macau territory, and strict regulations imposed on online sales or selling by means of non-face-to-face methods. However, the use of different types of insurtech solu- tions – such as online claims portals, mobile apps for after-sale services or administrative services, or the use of AI solutions to improve offerings to policyhold- ers – is becoming more widespread. 10.2 Regulatory Response The regulatory sandbox established in the FSA dem- onstrates the progressive approach being taken to align with the overall vision in boosting modern financial development supported by technology and innovation. In line with this, the regulator has issued Circular No 008/B/2023-DSB/AMCM addressed to all financial institutions, setting out the relevant regula- tory requirements in respect of trial projects for inno- vative financial technology. Besides the legal framework and limitations men- tioned in 10.1 Insurtech Developments , the regula- tor is expected to continue to enact further regulatory
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