Second Captive Insurer Sets Up In Hong Kong

Mary Swire, Tax-news.com, Hong Kong

06 December 2000

Hong Kong is relatively new to the concept of captive insurers - companies set up so that the parent company can insure its own risk, keeping the insurance premiums within the group structure - but this week the Office of the Commissioner of Insurance announced that CNOOC Insurance Ltd, a subsidiary of China National Offshore Oil Corporation (CNOOC), was authorised as a captive insurer under the Insurance Companies Ordinance.

CNOOC, an offshore oil and gas exploration group in China, chose Hong Kong as a convenient location to set up a captive insurer and Hong Kong's Commissioner of Insurance, Benjamin Tang, has welcomed the move: 'We are very glad to have the CNOOC taking the lead as the first Chinese mainland enterprise to choose Hong Kong as the domicile of its captive insurer. This is the second captive insurer authorised in Hong Kong, the first one being authorised last June,' he said.

Mr Tang said he hoped that the arrival of CNOOC Insurance would encourage other enterprises in mainland China to set up captive insurers in Hong Kong, adding that Hong Kong provides an excellent environment for establishment of captive insurers by Chinese Mainland enterprises.

According to Mr Tang, much of Hong Kong's attractiveness lies in its close proximity to mainland China and availability of professional captive management expertise. He said that the Hong Kong government would continue its efforts in promoting captive insurance business in Hong Kong.

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