ENG-2020 — Page 106

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Financial and Monetary Affairs

Direct Regulation of Insurance Intermediaries

By the end of 2020, the IA had received some 17,900 new licence applications since it assumed direct regulation of insurance intermediaries in September 2019, of which 93 per cent had been approved.

Risk-based Capital Regime

In 2020, the IA continued to engage stakeholders in developing a risk-based capital regime for Hong Kong's insurance industry in line with international standards.

International Collaboration

As a member of the International Association of Insurance Supervisors, Hong Kong observes international principles and standards in its insurance supervisory regime. The IA's Chief Executive Officer was reappointed to the association's Executive Committee for another two years in December.

Tax Deductions for Voluntary Retirement Savings

From the 2019-20 year of assessment, taxpayers can claim deductions under salaries tax and personal assessment for premiums paid to qualifying deferred annuities and contributions made to tax-deductible voluntary MPF contribution accounts, subject to a tax-deductible cap of $60,000 each year per taxpayer. From April 2019 to December 2020, members of the public bought around 160,000 deferred annuity policies (involving around $11.4 billion of annualised premium) and opened around 44,000 tax deductible accounts (accumulating around $2.7 billion contributions), reflecting the positive response to the tax deductions arrangements.

Mandatory Provident Fund System

MPF schemes had a net asset value (NAV) of around $1,139 billion at the end of 2020 and an annualised rate of return of 4.8 per cent between December 2000, when the MPF System was launched, and December 2020.

Chart 6

Total NAV of MPF Schemes

HK$ Billion

1,200

1,000

1,139

969

800

844

813

600

646

400

200

2016

2017

2018

2019

2020

Year

70