In response to ongoing financial instability at Tahoe Life Insurance Company, the Hong Kong Insurance Authority (HKIA) has taken decisive action by appointing Deloitte’s Derek Lai, Forrest Kam, and Oliver Cheng as Joint and Several Managers under Section 35(2)(b) of the Insurance Ordinance. This move grants the managers comprehensive control over Tahoe Life’s operations and assets.
Since mid-2020, the HKIA has enforced supervisory measures designed to safeguard policyholders while urging Tahoe Life’s management and shareholders to resolve issues stemming from related party transactions. Despite these efforts and the appointment of advisors in August 2023 to offer recommendations, Tahoe Life has failed to deliver audited financial statements for 2022 and 2023, attract new strategic investors, or enhance corporate governance.
Given that the majority shareholders are entangled in multiple debt proceedings, the intervention by the Managers is considered crucial for evaluating the company’s financial health, preserving capital resources, and identifying recovery strategies for policyholders.
While previous regulatory actions have ensured that Tahoe Life could meet its insurance obligations, policyholders are advised to carefully review their circumstances and avoid making hasty decisions.
In a synchronized regulatory response, the Bermuda Monetary Authority (BMA) has appointed Marcin Czarnocki, Derek Lai, Forrest Kam, and Oliver Cheng as Joint Provisional Liquidators (JPLs) of Tahoe Life by order of the Bermuda Supreme Court. This appointment aims to protect Tahoe Life’s assets for the benefit of policyholders rather than to liquidate the company.
The HKIA and the BMA have been collaborating closely on regulatory measures concerning Tahoe Life, given its Bermuda incorporation. The appointment of JPLs in Bermuda complements the Managers’ efforts in Hong Kong to assess Tahoe Life’s financial status and implement effective recovery plans.
