Hong Kong’s Insurance Authority formally designated AIA Group and Prudential Corporation Asia as domestic systemically important insurers.
The move comes alongside the launch of a new supervisory framework for DSIIs in the city.
The regulator said DSIIs are insurers whose failure would significantly disrupt Hong Kong’s financial system. To manage that risk, the IA introduced a two-step classification process combining quantitative and qualitative assessments.
Companies identified as DSIIs face strengthened supervisory requirements going forward.
The IA added it will recommend to the financial secretary that all designated insurers fall under the Financial Institutions (Resolution) Ordinance.
That would equip regulators with more tools for resolvability assessments and resolution planning.
According to the statement, AIA and Prudential Asia qualified due to their international activity, scale, and adherence to supervisory standards under the groupwide supervision framework of the IA. Annual reassessments will follow, in line with international practice.
The regulator stressed that insurers of this size, importance, and interconnectedness could cause material disruption to Hong Kong’s economy if distressed or allowed to fail in disorderly fashion.
The framework mirrors thresholds set by the International Association of Insurance Supervisors for internationally active insurance groups.
For AIA and Prudential Asia, the designation cements their status as linchpins of Hong Kong’s insurance market, while putting them under tighter oversight as part of a broader macroprudential safety net.
