The Hong Kong Risk Based Capital (HKRBC) framework came into full operation on July 1. In this e-Alert, we highlight some of the key changes of the HKRBC Insurance Rule. We also detail key requirements set out in the guideline on Establishment and Maintenance of Fund(s) in respect of Participating Business (“GL34”). Our discussion includes the following:

• An overview of the HKRBC insurance rule 
• GL34 for par business 
• Potential areas of optimisation under HKRBC and GL34
• Balance sheet management through hedging programs
• Enhancements of modelling of dynamic management actions and policyholder behaviour
• Risk transfer through reinsurance arrangements