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A government spokesman said today (Wednesday) that in the past, there had been no standard valuation basis on which the assets and liabilities in respect of general business were to be valued.
"Although the existing ordinance provides some guidelines for valuation, they are non-specific and non-standard," the spokesman said.
"The absence of a standard valuation basis is undesirable as any overstatement of asset values or understatement of liability values would undermine the protection to policy holders intended by the solvency margin requirement under the ordinance.
"Following the introduction of this regulation, the protection of policy holders' interest, as well as the financial stability of the insurance industry, will be enhanced," the spokesman said.
A transitional period of 12 months is allowed for existing insurers to prepare for compliance with the regulation.
"The regulation will however apply immediately to an insurer which is authorised after its commencement," the spokesman added.
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Water storage figure
Storage in Hong Kong's reservoirs at 9 am today (Wednesday) stood at 87 per cent of capacity or 509.822 million cubic metres.
This time last year the reservoirs contained 435.188 million cubic metres of water, representing 74.3 per cent of capacity.
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