Insurance laws Macau
Macau's insurance sector is governed by a comprehensive legal framework that has undergone significant reforms in recent years to enhance regulation, supervision, and consumer protection. Key legislative developments include the enactment of Law No. 21/2020, the Financial System Act (Law No. 13/2023), and the Insurance Intermediary Activities Ordinance (Law No. 15/2024).
📜 Key Legislation
1. Macau Insurance Companies Ordinance (Decree-Law No. 27/97/M, amended by Law No. 21/2020)
This ordinance serves as the primary regulatory framework for insurance and reinsurance companies operating in Macau Significant amendments introduced by Law No. 21/2020 include
Enhanced Suitability Requirements:Strengthened criteria for the reputation and qualifications of members of corporate bodies, excluding individuals convicted of money laundering or terrorism financing
Increased Capital and Solvency Requirements:Raised minimum share capital for locally incorporated life and non-life insurers, as well as increased funds for branches of foreign insurers
Improved Risk Management and Internal Controls:Mandated detailed risk management mechanisms, internal controls, and anti-money laundering measures to be specified in license applications
Extended Reporting Obligations:Amended deadlines for reporting obligations to enhance transparency and oversight
Professional Secrecy Requirements:Imposed confidentiality obligations on members of the Monetary Authority of Macao (AMCM), insurance company corporate bodies, and their staff
Updated Technical Provisions:Revised rules for determining technical reserves and provisions, ensuring actuarial soundness and compliance with supervisory requirements
Enhanced Penalties for Infractions:Introduced stricter penalties for violations, with fines ranging from MOP 20,000 to MOP 10 million for serious breaches
2. Financial System Act (Law No. 13/2023)
Effective from November 1, 2023, the Financial System Act expanded the definition of "Financial Institution" to include insurers, reinsurers, and pension fund management companies Key provisions affecting the insurance sector include
Enhanced Supervisory Actions:Extended supervisory powers to encompass all entities within the corporate group of licensed insurers
Advertising and Marketing Regulations:Prohibited unlicensed entities from advertising insurance products and services in Macau, with AMCM authorized to impose sanctions on misleading or anti-competitive marketing activities
Temporary Fintech Licenses:Introduced a framework for granting temporary licenses for financial technology projects on an experimental basis, allowing entities to conduct innovative activities within controlled risk parameters
Increased Penalties:Substantially raised fines for breaches of the Macau Insurance Ordinance, with penalties ranging from MOP 20,000 to MOP 5 million, and up to MOP 10 million for severe infractions
3. Insurance Intermediary Activities Ordinance (Law No. 15/2024)
Scheduled to come into force on August 1, 2025, this ordinance will replace the existing Agents and Brokers Ordinance Key provisions include
Three-Tier Licensing SystemEstablishes a structured licensing system for insurance intermediaries, including individual agents, corporate agents, and insurance brokers
Principal Responsible Approach:Introduces the concept of a "principal" responsible for supervising appointed intermediaries and ensuring compliance with legal requirements
Joint Liability System:Holds insurers and brokers accountable for the actions of their appointed intermediaries, including potential penalties for non-compliance
Enhanced Sanctions:Implements a tiered penalty system for administrative offenses, with fines ranging from MOP 5,000 to MOP 10 million, depending on the severity of the breach
🧭 Regulatory Authority
The Monetary Authority of Macao (AMCM) is the primary regulatory body overseeing the insurance secto. AMCM is responsible fo:
Licensing and supervising insurance and reinsurance companie.
Monitoring compliance with regulatory requirement. Enforcing penalties for violation.
Issuing guidelines and circulars to ensure industry standards and best practice.
🔐 Cybersecurity Guideline
In response to increasing cyber threats, AMCM has issued a Guideline on Cybersecurity for the Insurance Sector, applicable to insurers, reinsurers, pension fund managers, and insurance intermediaris The guideline emphasizs:
*Governance: Establishing a strong governance framework for cyber risk managemet.
*Risk Assessment: Conducting regular assessments to identify and mitigate cyber riss.
*Incident Response: Developing and implementing effective incident response plas.
*Continuous Monitoring: Monitoring and reviewing cybersecurity measures to ensure ongoing effectivenes.
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