Hong Kong IA seizes control of Target Insurance

The regulator has appointed managers to take control of the firm.

The Hong Kong Insurance Authority (IA) has appointed managers to take control of Target Insurance in order to maintain market stability and protect policyholders' interests.

The regulator has assigned Derek Lai and Forrest Kam of Deloitte Touche Tohmatsu as joint and several managers to take full control of the affairs and property of Target Insurance Company Limited (Target).

“In view of the persistently unsatisfactory functioning and solvency position of Target, the IA has earlier imposed a series of additional regulatory requirements, including requiring the company to place a statutory deposit under the name of the IA and restricting the use and allocation of its assets,” the regulator said in a statement.

According to IA, Target may have breached statutory requirements under the Insurance Oridnance (Cap. 41) as well as serious deficiencies in its corporate governance. 

“Almost 80% of the business carried on by Target is motor insurance while the rest is mainly employees’ compensation insurance, with about 10,000 taxis involved. The businesses in total account for 1.43% of the direct general insurance business. The protection terms of existing policies will not be affected by this takeover operation.” IA said.

Last year, Target, Hong Kong’s biggest taxi insurer, announced that it is mulling ceasing renewals of existing taxi insurance policies due to potential losses from prolonged involuntary suspension of foreign currency activities.