Segregation of Hong Kong Assets - Impacts Hong Kong Designated Policyholders

Upcoming changes to policies

Under our Hong Kong regulatory obligations, details of any RL360 Services Hong Kong Investment-Linked Assurance Scheme (“ILAS”) which is authorised by the Securities and Futures Commission in Hong Kong (“RL360 Services Hong Kong ILAS”), or RL360 Services policy application which was originally processed through our Hong Kong branch, are reportable to the Insurance Authority of Hong Kong (the ”IA”). 

The principal function of the IA is to regulate and supervise the insurance industry for the promotion of the general stability of the insurance industry and for the protection of existing and potential policyholders.

The segregation of assets

In line with the changing regulatory landscape in Hong Kong, it will become a regulatory requirement for our company to separate the assets of our insurance business carried on in or from Hong Kong, from the assets of our insurance business carried on in or from other jurisdictions. The segregation of assets is a method commonly used to protect policyholder’s assets should a business become insolvent.

Hong Kong designated policyholders

• RL360 Services Hong Kong ILAS policyholders are classified as a Hong Kong Onshore designated policyholder, even if not resident in Hong Kong.
• Holders of RL360 Services policies where the application was originally processed through our Hong Kong branch are classified as a Hong Kong Offshore designated policyholder, regardless of their current residential address

How we will carry this out

As the funds available to Hong Kong Onshore and Offshore designated policyholders are also available to non-Hong Kong policyholders, to assist with internal accounting and segregation purposes we will be separating the funds into two ranges. One will be exclusively for investment from our Hong Kong designated policyholders (the “Hong Kong funds”) and one for investment from other jurisdictions. 

The Hong Kong funds will be a replica of the current funds available in the range, with the same names, investment objectives and charging structure, however, they will be given new fund codes to differentiate them. We will only accept investment into the Hong Kong funds from Hong Kong designated policyholders.

Moreover, in order to segregate the assets, we will operate trading accounts and custody accounts with our safekeeping custodian, Citibank, specifically for the Hong Kong funds. 
 

What changes policyholders will see in their policy

The Hong Kong funds will only become available on 19 October 2024.

In order to implement the asset segregation, on 19 October 2024 (the “Switch Date”), Hong Kong designated policyholders' current holding(s) will be switched, and any regular premium allocation redirected (where applicable), into the corresponding Hong Kong fund(s). An equivalent unit allocation and value will be switched from their current holding(s) into the corresponding Hong Kong fund(s) on their policy. This may take up to two working days to be visible on policies.

Policyholders will not be disadvantaged by the switch of holding(s) into the corresponding Hong Kong fund(s) and no charges will occur as a result of the switch.

Policyholders do not need to take any action as a result of this notification as the changes detailed above will happen automatically in their policy.

With Profits Funds or Guaranteed Growth Funds are unaffected by the segregation of assets mentioned above and no switches will take place on these funds within Hong Kong designated policies. 

Switching funds

Until the Switch Date, policyholders are free to switch existing holding(s), and/or to redirect future regular premiums (if any), to different fund(s) in the current range. 

Following the Switch Date policyholders will continue to have the option to switch at any time, free of charge, within the designated Hong Kong funds.
 

Our website currently contains funds marked with “#” which are not available to Hong Kong designated policyholders. From 16 October 2024, our fund centres will be updated to indicate which funds are the Hong Kong funds available to Hong Kong Offshore and Hong Kong Onshore designated policyholders.

Policyholders and advisers have been contacted primarily by e-shot, with letters sent by post where we do not hold a valid email, and to those who prefer to receive letters by post.  Sample letters can can be found opposite.

We recommend that policyholders seek the advice of their usual investment adviser before making any investment decisions.

Should you have any questions regarding these changes, please contact the Investment Marketing Team.