Insurance companies may be asked to inject added capital if they want to underwrite proposed mortgage insurance business, according to assistant commissioner of insurance Mok Hin-yiu.
The mortgage insurance plan proposed by the Government last week will remove the 70 per cent mortgage ceiling cap and allow banks to offer 85 per cent mortgage loans starting from the first quarter of next year.
The Hong Kong Mortgage Corp will arrange for banks to purchase mortgage insurance to cover the extra 15 per cent.
Mr Mok said the insurance commissioner would monitor how insurance companies planned to offer the new product in Hong Kong.
'We have to ensure insurers which want to launch mortgage insurance have sufficient financial strength. The commissioner may request them to inject more capital to back up the new product,' he said.
'We would also monitor risk concentration to avoid insurers underwriting too much of this new business.'
