Common use of COLLABORATIVE ARRANGEMENTS Clause in Contracts

COLLABORATIVE ARRANGEMENTS. T he IA’s designation of a DIHC and determination of the scope of the supervised group of such DIHC 9. Under section 95C of the IO, where the IA is appointed as the group supervisor of an insurance group (in accordance with the principles adopted by the International Association of Insurance Supervisors), the IA has the power to designate an insurance holding company within such insurance group as a DIHC. Section 95D of the IO sets out the default members of the supervised group of a DIHC, and the IA is empowered thereunder to include or exclude an entity as a member of the supervised group. 10. Without limiting the IA’s discretion to exercise the powers under sections 95C and 95D of the IO, the IA hereby acknowledges that as a general principle, its intention is not to designate an HKMA regulated entity as a DIHC under section 95C of the IO, and not to include an HKMA regulated entity as a member of the supervised group of a DIHC under section 95D(3) of the IO. In the (albeit unlikely) event, therefore, that: (a) the IA proposes to designate an HKMA regulated entity (which is also an insurance holding company) as a DIHC under section 95C of the IO; (b) upon a designation referred to in paragraph 10(a) above, another HKMA regulated entity will become a member of the supervised group of the DIHC by reason of such HKMA regulated entity being a default member of the prospective supervised group within the meaning of section 95D(1) of the IO; (c) upon a designation referred to in paragraph 10(a) above, the supervised group of the DIHC is a sub-group within a wider financial group of which another HKMA regulated entity is a member (even though such HKMA regulated entity will not be a member of the supervised group of the DIHC); or (d) the IA proposes to exercise its power under section 95D(3) of the IO to include an entity which is an HKMA regulated entity as a member of the supervised group of a DIHC, the IA will consult with the MA, prior to the IA commencing the designation or inclusion process, as the case may be, and if the designation or inclusion proceeds as the IA proposed, the IA will maintain close dialogue with the MA throughout such process. 11. Without limiting the IA’s discretion to exercise the powers under section 95C of the IO, in the event that the IA proposes to designate an insurance holding company (not being an HKMA regulated entity) as a DIHC under section 95C of the IO, and on designation: (a) this will result in an HKMA regulated entity becoming a member of the supervised group of the DIHC by reason of such HKMA regulated entity being a default member of the prospective supervised group within the meaning of section 95D(1) of the IO; or (b) the supervised group of the DIHC is a sub-group within a wider financial group of which an HKMA regulated entity is a member (even though such HKMA regulated entity will not be a member of the supervised group of the DIHC), the IA will consult with the MA prior to the IA proceeding with its decision on whether or not to designate. If the designation proceeds as the IA proposed, the IA will maintain close dialogue with the MA throughout such process. 12. In relation to a DIHC designated under section 95C of the IO, in the event that: (a) an HKMA regulated entity (which earlier was not within the supervised group of the DIHC) subsequently becomes a member of the supervised group of the DIHC by reason of such HKMA regulated entity being a default member of the supervised group within the meaning of section 95D(1) of the IO; or (b) the IA becomes aware that an HKMA regulated entity (which earlier was not within the wider financial group of which the supervised group of the DIHC is a sub-group) subsequently becomes a member of such wider financial group (but is not itself a member of the supervised group of the DIHC), the IA will inform the MA accordingly. 13. Without limiting the IA’s discretion to exercise the powers under sections 95D or 95E of the IO, the IA will consult the MA before: (a) pursuant to section 95E of the IO, the IA withdraws a designation of a DIHC, where (i) the supervised group of the DIHC includes an HKMA regulated entity, or (ii) the supervised group of the DIHC is a sub-group within a wider financial group of which an HKMA regulated entity is a member (even though the HKMA regulated entity is not a member of the supervised group of the DIHC); and (b) pursuant to section 95D(4) of the IO, the IA excludes an HKMA regulated entity from being a member of the supervised group of a DIHC.