MACAU SAR, CHINA Trends and Developments Contributed by: Carlos Eduardo Coelho and Shanley Lei, MdME
sustainable insurance market. For insurers, the tran- sition to RBC will require a comprehensive reassess- ment of capital strategies, investment policies and reinsurance arrangements. Insurers will need to adopt more sophisticated risk models, strengthen stress testing, and integrate risk management into strategic planning. New Investment Fund Law Opens Up New Opportunities The recent enactment of Macau’s Investment Fund Law represents a major milestone in Macau’s financial development. Backed by strong policy support from the Chinese government, the Macau SAR is actively promoting its investment fund environment to attract global fund managers and investors and encourage them to consider Macau a preferred jurisdiction. This initiative is designed to position Macau as a competi- tive hub for wealth and asset management within the Greater Bay Area and beyond. As more asset management firms establish operations in Macau to manage investment funds, the insurance market is expected to expand. These firms will require a range of insurance solutions, including professional indemnity coverage, directors’ and officers’ liability, cyber risk protection and operational risk insurance. For insurers, this evolving landscape, focusing on the development of a wealth management industry with Macau characteristics, presents new opportunities to design specialised products tailored to the needs of asset managers and institutional investors. Pension Funds, Longevity and Protection Gaps The pension funds industry is becoming increasingly important as policymakers work to address the grow- ing need for retirement security in an aging society (and where Macau stands as a region with among the highest life expectancies in the world). Life insurers have long played a leading role in this system, as they are authorised (and indeed are the driving force) to manage pension fund business alongside specialised pension fund management companies. Currently, aside from social security backed by the government, the pension fund system is organised through two principal arrangements: the Private Pen- sion Fund (PPF) scheme and the Non-Mandatory
Central Provident Fund (NCPF) scheme, both of which allow voluntary participation by employers and employees. Looking ahead, the period between 2026 and 2028 is expected to bring material policy changes, with discussions surrounding the introduction of an MPF scheme. The 2026 Macau’s Chief Executive Policy Address made it clear that the Macau government wants to encourage wider NCPF participation, cre- ating an environment for the full implementation of MPF. If this goes ahead, it would be a major reform for Macau’s social and financial system, boosting retire- ment savings and giving life insurers new opportuni- ties to create complementary retirement products. Ultimately, moving to an MPF scheme will make life insurers even more central to Macau’s retirement sys- tem, helping to build financial resilience and inclusive- ness. By getting more people involved and strength- ening the retirement savings framework, Macau is setting the stage for a sustainable and secure financial system that can support its growing aging population. Cross-Border Integration and Insurance Opportunities in the Hengqin Co-Operation Zone The partnership between Macau and the Hengqin Co-Operation Zone is a key part of regional integra- tion under the Greater Bay Area plan. Hengqin acts as an extension of Macau’s economic and social reach, providing a platform for cross-border work in finance, insurance and other sectors. The goal is to create a smooth environment for residents and businesses, encourage innovation, and strengthen ties between Macau and Mainland China. A key policy priority under the Macau SAR Develop- ment Plan on Appropriate Economic Diversification (2024–2028) is to accelerate the development of inno- vative medical insurance products for Mainland China residents. Authorities are actively negotiating to relax foreign exchange controls for certain insurance prod- ucts, enabling seamless cross-border transactions for renewals, surrenders and claims. This initiative opens the door for collaborations between Mainland financial institutions and Macau insurers, creating integrated service models and improving customer experience,
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