Special Report – AMCM’s work

The market evolves so quickly that the regulator’s job is never done

Macau Business | November 2022 | Special Report | Macau’s insurance industry


 The AMCM completed the revision of the “Macao Insurance Ordinance” in 2018, which stipulates the conditions for market access, supervisory requirements for insurance companies and their responsibilities. The Macau Insurance Ordinance is the main legislation for regulating operations of the insurance sector.

Since then, and in line with international supervisory standards, the AMCM has formulated the “Guidelines on Corporate Governance of Authorised Insurers”, the “Guideline on the Requirements of the Actuarial Valuation Report of Authorised Life Insurers”, the “Guidelines on Prevention and Combating Money Laundering and Financing of Terrorism in Insurance”, the “Guidelines on the Requirements of Actuarial Functions of Authorised Life Insurers and the Appointment of Appointed Actuary” and the “Guideline on Cyber Resilience for Insurance Sector”.

In accordance with the “Insurance Core Principles” set out by the International Association of Insurance Supervisors and corporate governance standards applicable to the insurance sector, the AMCM also issued the “Guideline on Life Insurance Product Governance” in 2021.

The “Guideline” requires each life insurer to set up a product approval committee for approving life insurance products to be sold in Macau. Meanwhile, it introduces the minimum regulatory requirements for life insurance products, covering product design, customer suitability assessment, information disclosure, and governance of non-guaranteed benefits, so as to improve the quality-of-life insurance products and protect the rights and interests of customers.

But the work is far from complete.

“In line with the rapid development of the insurance business,” after having completed the revision of the Macau Insurance Ordinance, the AMCM has been reviewing the “Legal Framework for the Carrying on of Insurance Intermediary Business.” (See text on these pages)

At the end of 2021, the AMCM has stipulated the scope of coverage and conditions for seven types of compulsory insurance, namely: the motor vehicle insurance, the employees’ compensation insurance, the professional liability insurance for travel agencies, the professional liability insurance for lawyers, the public liability insurance in relation to the fixing of propaganda and public material, the third-party liability insurance for pleasure boats; and the professional liability insurance for healthcare providers. According to the Authority, working groups were formed “with relevant regulatory bodies and stakeholders to review the implementation of compulsory insurance in response to actual needs and conditions.”

In addition, the AMCM is now conducting “an independent assessment of the adequacy of premiums and the sum insured for each type of vehicle in motor vehicle insurance.”

Following the completion of the actuarial analysis,  AMCM states that it will study the motor vehicle insurance system’s review plan and maintain communication with law enforcement agencies and stakeholders in order to carry out the plan.

Also this year, the coverage of insurance provided to SMEs was extended to cover losses incurred when the Black Rainstorm Warning Signal is raised.


Insurance intermediaries

“The rapid development of Macau’s insurance industry in recent years has brought in an increasing number of insurance intermediaries,” states the local Authority.

“As the bridge of communication and sales between insurance companies and existing or potential customers, insurance intermediaries are obliged to conduct legitimate business operations and promote the healthy development of the sector. Their professional ethics and business conduct have an exceptional impact on the public,” understands the local regulatory agency.

Therefore, the AMCM promulgated the “Ethics for Insurance Intermediary Activities” in 2021, whereby the “Conduct Rules for Insurance Intermediary Activities”, the “Guidelines on Conduct Requirements for Insurance Agents’ Activities” and the “Guidelines on Conduct Requirements for Insurance Brokers’ Activities” were issued.

The rules and guidelines stipulate the principal requirements for the business conduct of insurance intermediaries and the expected standards of compliance.

“To ensure fair treatment of customers, insurance companies are required to implement effective internal control measures and procedures, as well as to maintain a sound level of insurance intermediaries’ professional ethics and business conduct through providing adequate training, advises AMCM.

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