Hong Kong Regulations

INSURANCE COMPANIES (GENERAL BUSINESS) (VALUATION) REGULATION - SECT 5

Shares in investment subsidiaries

(1) Where an insurer is the holding company of another company whose principal
business is investment in lands or buildings, listed shares or securities,
unlisted shares or securities, unit trusts or mutual funds, or any combination
of these investments, the value of the holding of the shares held by the
insurer in such a subsidiary must be determined and reported in accordance
with the following provisions of this section and not in accordance with
section 4 or 7.

(2) The assets and liabilities of such a subsidiary must be classified into
classes in accordance with this Regulation and in accordance with the
classification of the assets and liabilities of the insurer and of any other
subsidiary of the insurer to which this section applies, where applicable, and
valued on the same date as the assets and liabilities of the insurer are
valued.

(3) Subject to subsections (4) and (5), the value of each item of asset or
liability of the subsidiary in each class must be determined in accordance
with this Regulation (excluding section 14) and the total value of the assets
or liabilities in each class attributable to the shares in the subsidiary held
by the insurer must be consolidated with the total value of the same class of
assets or liabilities held by the insurer itself or by another subsidiary of
the insurer to which this section applies or by both, and where there is no
corresponding class of assets or liabilities held by the insurer itself or by
another subsidiary of the insurer to which this section applies, the value of
that class of assets or liabilities of the subsidiary must be shown as a
separate class.

(4) The value of each class of assets or liabilities of each subsidiary,
whether or not it has been consolidated under subsection (3) with the assets
or liabilities of the same class of the insurer or another subsidiary, must
also be disclosed-

   (a)  where it has been so consolidated, either in a separate note or
        following the consolidated sum; or

   (b)  where it has not been so consolidated, in a separate note or following
        the value of that class of assets or liabilities.

(5) The value of any sum owing by the insurer to the subsidiary or vice versa,
so far as it is attributable to the shares in the subsidiary held by the
insurer, must be deducted from the value of that class of assets or
liabilities held by the insurer and the subsidiary.

(6) For each subsidiary the values of whose assets and liabilities have been
determined and reported under this section, the following must be disclosed-

   (a)  the name of the subsidiary;

   (b)  the proportion of the nominal value of the issued shares of each class
        of shares held by the insurer;

   (c)  the nature of business of the subsidiary; and

   (d)  the place of incorporation of the subsidiary. (Enacted 1995)