China discourages citizens from buying Hong Kong insurance
China’s attempt to control capital outflows could hit Hong Kong insurance buyers hard.
Products denominated in the Hong Kong dollar and US dollar, as well as other currencies pose risks for buyers, the China Insurance Regulatory Commission said in a statement on its website Friday.
The regulator said purchases of overseas life and investment-related insurance products are transactions under the capital account.
This could affect the ability of policyholders to make timely premium payments if foreign-exchange payment policies change, the regulator said.
Also, they are covered by Hong Kong’s laws, not China’s, it said.
Since February, Chinese regulators have moved to control residents’ purchases of insurance in Hong Kong, transactions that had served as a convenient way of skirting the country’s currency controls.