NEW regulations governing industry standards for valuation of assets and liabilities of general insurance companies will come into effect tomorrow.
The Insurance Companies Ordinance, to be gazetted tomorrow, deals with ways to determine an insurer's solvency.
The new regulation lays down different valuation requirements for different categories of assets and liabilities, including land and buildings, shares and securities, and investments in subsidiary companies.
It stipulates the percentage limits permissible for different categories of assets in order to ensure a prudent spread of investments by an insurer.
Previously, there had been no standard valuation yardstick to measure a general insurer's assets and liabilities.
The new regulation seeks to provide a standard and prudent basis for the valuation of assets and liabilities in respect of general business for the purposes of determining an insurer's solvency under the Insurance Companies Ordinance.
