Hong Kong Regulations

INSURANCE COMPANIES (GENERAL BUSINESS) (VALUATION) REGULATION - SECT 4

Listed shares or securities, unit trusts or mutual funds

(1) The value of the following listed share, listed security, holding of a
unit, or other beneficial interest, in a unit trust or mutual fund must be not
greater than 100% of the middle market quotation of the share or security or,
as the case may be, 100% of the market value of the holding of the unit, or
other beneficial interest, in the unit trust or mutual fund, on the
relevant date-

   (a)  listed security issued or guaranteed by the Hong Kong Government or
        the Exchange Fund established under the Exchange Fund  Ordinance (
        Cap 66);

   (b)  listed share, listed security, unit trust or mutual fund with-

        (i)    a current credit rating appraised by a credit rating agency set
               out in column 1 of Table 1 which is not lower than- (A) in the
               case of long term rating, the rating specified in column 2 in
               relation to that credit rating agency; and (B) in the case of
               short term rating, the rating specified in column 3 in relation
               to that credit rating agency; or

        (ii)   a current credit rating appraised by a credit rating agency
               approved by the Insurance Authority which rating is considered
               by him to be a rating equivalent to a rating in Table 1.

TABLE 1

Column 1 Credit rating agency Column 2
Long term rating Column 3
Short term rating Moody's Investors Service, Inc. Aaa or aaa Prime-1 Standard
and Poor's Corporation AAA A-1+

(2) The value of a listed share, listed security, holding of a unit, or other
beneficial interest, in a unit trust or mutual fund with the following credit
rating must be not greater than 90% of the middle market  quotation of the
share or security or, as the case may be, 90% of the market value of the
holding of the unit, or other beneficial interest, in the unit trust or mutual
fund, on the relevant date-

   (a)  a current credit rating appraised by a credit rating agency set out in
        column 1 of Table 2 which is not lower than-

        (i)    in the case of long term rating, the rating specified in column
               2 in relation to that credit rating agency; and

        (ii)   in the case of short term rating, the rating specified in
               column 3 in relation to that credit rating agency; or

   (b)  a current credit rating appraised by a credit rating agency approved
        by the Insurance Authority and considered by him to be a rating
        equivalent to a rating in Table 2.

TABLE 2

Column 1 Credit rating agency Column 2
Long term rating Column 3
Short term rating Moody's Investors Service, Inc. Aa3 or aa3 Prime-2 Standard
and Poor's Corporation AA- A-1

(3) The value of any other listed share, listed security, holding of a unit,
or other beneficial interest, in any other unit trust or mutual fund must be
not greater than 75% of the middle market quotation of the share or security
or, as the case may be, 75% of the market value of the holding of the unit, or
other beneficial interest, in the unit trust or mutual fund, on the
relevant date. (Enacted 1995)