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Important Information

Financial Strength

Identity of Service Provider

Underwriters

Authorisation Status

Policy dividend (for Participating Products)

Policy Crediting Interest Rates (for Universal Life insurance products)

Customer Feedback

Financial Strength

Standard & Poor's
HSBC Life (International) Limited is rated AA-

Standard & Poor's category description 'AA':
An insurer rated "AA" means very strong capacity to meet financial commitments.
Rating 'AA' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.

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Identity of Service Provider

The Hongkong and Shanghai Banking Corporation Limited is an insurance agent authorised by HSBC Life (International) Limited and AXA General Insurance Hong Kong Limited.

Address: 1 Queen's Road Central, Hong Kong SAR
Telephone Number:
For HSBC Premier customers: (852) 2233 3322
For HSBC Advance customers: (852) 2748 8333
For Other customers: (852) 2233 3000


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Underwriters

The life insurance plans are underwritten by HSBC Life (International) Limited ("HSBC Life") and the medical and general insurance plans are underwritten by AXA General Insurance Hong Kong Limited ("AXA"). HSBC Life is authorised and regulated by the Office of the Commissioner of Insurance ("OCI") of the Hong Kong Special Administrative Region ("HKSAR") to carry on long-term insurance business in the HKSAR. AXA is authorised and regulated by OCI to carry on general insurance business in the HKSAR. The Hongkong and Shanghai Banking Corporation Limited ("HSBC") is an insurance agent authorised by HSBC Life for the distribution of life insurance products in the HKSAR and also by AXA for the distribution of medical and general insurance products in the HKSAR.

Address:
For Life Product: 18/F, Tower 1, HSBC Centre, 1 Sham Mong Road, Kowloon, Hong Kong SAR
For Medical Product: PO Box 90784 Tsim Sha Tsui Post Office
For General Insurance Product: PO Box 90918 Tsim Sha Tsui Post Office

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Authorisation Status

Insurance products offered by AXA General Insurance Hong Kong Limited are only available for subscription by residents of the Hong Kong SAR applying in Hong Kong SAR.

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Policy dividend (for Participating Products)


Participating policy


HSBC Life (International) Limited ("the Company") issues participating policies, which are life insurance contracts providing both guaranteed and non-guaranteed benefits. The non-guaranteed benefits comprise the policy dividends which allow policyholders to participate in the financial performance of the life insurance operation. The policy dividends, if any, are in form of:

i) Annual dividends which are declared by the Company on an annual basis. Once declared, the amount of annual dividends for the year becomes vested and will be credited to your policy.
ii) Terminal bonus which is a one-off entitlement declared at some a pre-determined policy year or upon early termination of the policy (e.g. death, surrender etc.) before the pre-determined policy year. The amount of terminal bonus may change from time to time based on the performance over the entire period before such declaration as well as the prevailing market condition and the actual amount will not be determined until it is payable.

Please refer to the policy provision of the respective plans for detailed terms and conditions. Terminal bonus is only offered under Income Goal Insurance Plan at present.

The policy dividends (including annual dividends and terminal bonus) are not guaranteed, whether they are payable and the size of the dividends to be paid depend on how well the Company has performed with regard to investment returns on the assets supporting the policies, as well as other factors including but not limited to claims, lapse experience, expenses, and the long term future performance outlook. If the performance over the long term is better than assumed level, then dividends paid would increase and if performance is worse than expected then dividends paid would reduce.

The key feature of participating policies over other forms of insurance policies is that in addition to the guaranteed benefits receivable, policyholders will also benefit from additional dividend payments if the insurance company's performance is better than that required to support the guaranteed benefits. The better the performance, the greater the dividend payments, and, conversely, the worse the performance, the lower the dividend payments.


Dividend Philosophy

The Company conducts regular review on the level of dividends payable to policyholders. Both the actual performance in the past and also management's outlook of the long term future performance will be assessed against the assumed level, if there were variances arisen, they will then be considered sharing with policyholders through the adjustment of dividend scales.

When considering the adjustment of dividend scales, the Company also operates a smoothing philosophy in order to maintain a more stable payout to policyholders, so the level of dividends will only be changed if the actual performance is significantly different from the assumed level over a period of time or if management's expectation of the long term future performance changes substantially.

In order to ensure the fairness between policyholders of participating products, the Company will carefully consider the experiences of different groups of policies (e.g. different products, currencies, issue years etc.) so that each group of policies will receive a fair return reflecting mostly its own performance. To balance the interest between policyholders and shareholders, a dedicated committee is established to provide independent advice on the management of the participating policies and the determination of dividends.


Investment Policy and Strategy

The Company follows an asset strategy that

i) Ensures that we can meet the guaranteed benefits that we have committed to you;
ii) Delivers to you competitive long-term returns through the non-guaranteed dividends and bonuses; and
iii) Abides by a pre-defined set of risk tolerance.

The assets supporting the participating policies predominantly consist of fixed income assets issued by government and corporate entities with good credit quality (average A-rated or above) and long term prospects. Growth assets, including equity-type investments and alternative investments such as property, private equity and hedge fund as well as structured products including derivatives, are utilized in order to deliver returns reflecting real economic growth in the long run.

Our investment portfolios are well diversified in different types of assets,and are invested in different geographical markets (mainly Asia, US and Europe), currencies (mainly HKD and USD) and industries.

Target Asset Allocation


Asset Type Allocation %
Income Goal Insurance Plan Other Plans
Fixed Income 60%-100% 80%-100%
Growth Assets
- Equities
- Alternative Investments
0%-40%
0%-30%
0%-30%
0%-20%
0%-15%
0%-15%

There could be slight deviation from the above range due to market fluctuation.


Actual allocations will take into consideration past investment performance of the assets supporting the policies, prevailing market conditions and future outlook, and the guaranteed and non-guaranteed benefits of the policies. This includes assessing factors such as risk tolerance and real economic growth over the appropriate time horizon.

For assets supporting Income Goal Insurance Plan, the exposure to growth assets is normally within the range of 0% to 40% during the accumulation period and the exposure will be reduced at the absolute discretion of the Company during the annuity period in order to achieve a relatively stable investment return.


Accumulation interest rate

Policyholders can choose to accept their dividends, endowment coupons and annuity payments either in cash or to leave them with the Company to accumulate with interests (if applicable). The rates of interests are not guaranteed and will be determined by the Company from time to time. The review on such accumulation interest rates will be conducted regularly with reference to the portfolio bond yields, prevailing market conditions, outlook on bond yields, and the likelihood of policyholders leaving their payment for accumulation.


Fulfillment Ratio and Total Payout Ratio

Fulfillment Ratio - in respect of non-guaranteed benefits


Total Payout Ratio - in respect of total benefits including guaranteed and non-guaranteed benefits

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Policy Crediting Interest Rates (for Universal Life insurance products)


Universal Life insurance products

Universal Life insurance products are long term insurance plans offering a high level of protection with competitive features and flexibility for policyholders' multi-generational planning needs and other insurance needs. For details of the product features and key risks of Universal Life insurance products, please refer to the relevant product materials and policy provisions or contact your relationship manager or insurance consultant.

The benefits provided by Universal Life insurance products are impacted by the crediting interest rates as well as applicable charges. The General Crediting Interest Rate is a floating rate determined by the Company, subject to a guaranteed minimum floor as stipulated on policy provisions.

For Universal Life insurance policies issued before 2004, the floating crediting interest rate as equivalent to the General Crediting Interest Rate is referred to as the 'Savings Bonus rate'.

Philosophy in deciding the General Crediting Interest Rate

The applicable General Crediting Interest Rates vary depending on the policy currency and product series. Such rates are regularly reviewed by the Company at its discretion. The Company will inform policyholders concerned for any subsequent change of the General Crediting Interest Rates for their policies.

When determining the General Crediting Interest Rate, which applies to each Universal Life insurance policy, the Company considers the investment returns on the underlying assets supporting the policies, as well as other factors, including but not limited to: the outlook of the long term future investment returns, the claims and surrender experience, and the expenses. If the investment returns over the long term are better than expected, then the General Crediting Interest Rate would increase and if the investment returns are worse than expected, then the General Crediting Interest Rate would reduce.

The investment returns on Universal Life underlying portfolios include interest earnings as well as losses or gains realized upon the disposal of assets or asset impairments. The claims include the cost of providing the death benefit and other insured benefits under Universal Life insurance policies. The surrenders include total and partial surrenders, and their corresponding impact on investments. The investment returns on Universal Life underlying portfolios are not guaranteed.

In order to ensure that discretion exercised when defining the crediting interest rates is fair to all policyholders, and that any conflicting interests of policyholders with other policyholders and/or shareholders have been addressed having due regard to the fair treatment of policyholders, the Company established a dedicated committee providing independent advice on the management of the universal life business.

Investment philosophy for Universal Life Underlying Portfolios

The Company maintains a prudent approach to investing for the Universal Life underlying portfolios, with the primary goal being the delivery of long term value to policyholders.

Each portfolio is invested in Corporate and Government bonds under pre-determined diversification and rating objectives. The current long term investment strategy is to invest in diversified long term investment grade bonds rated BBB- or above. Unrated bonds may also be considered if they fit the Company's risk appetite profile. However, the Universal Life underlying portfolios are conservatively positioned to limit the exposure to unrated bonds. The bonds are held by the Company to maturity in order to match its long term liabilities. Subject to our investment policy, derivatives may be utilized to manage the investment risk exposure, for matching between assets and liabilities and for efficient portfolio management.

For the historical crediting interest rates of the Universal Life insurance products of the Company, that had new policies issued in the previous 5 years, please refer to this document.

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Customer Feedback

We welcome any feedback about this web site or about the Bank's insurance services and products. Please contact us via email or call (852) 2233 3322 for HSBC Premier customers, (852) 2748 8333 for HSBC Advance customers or (852) 2233 3000 for other customers.

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In the event that we have not resolved any claim to your satisfaction, you may contact Insurance Claims Complaint Bureau(ICCB), an independent industry body established for the purpose of revolving personal claims issues, on (852) 2520 1868, or visit the ICCB website.

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