The Monetary and Insurance Authorities today signed a Memorandum of Understanding enhancing co-operation, information exchange and mutual assistance between the pair.

The move conforms with one of the recommendations of the Financial Sector Assessment Programme conducted by the International Monetary Fund earlier this year.

It called for more profound supervisory co-operation among financial regulators in supervising the cross-market activities of financial institutions.

Under the memorandum, the authorities agree to:

* Co-ordinate the supervision of insurance-related activities of authorised institutions, such as when they act as insurance intermediaries, and authorised insurers that are connected to such intermediaries; and,

* Promote information exchange and sharing, as permitted under the Banking and the Insurance Companies Ordinances, between both authorities to help each other exercise their respective statutory functions.

Both will determine together which agency shall be the co-ordinating regulator for financial groups that are engaged in both banking and insurance.

They will also establish principal points of contact to ensure the smooth operation of arrangements set out in the memorandum. Furthermore, both agreed to hold regular sessions discussing current or evolving supervisory issues, and to hold ad hoc meetings to deal with specific supervisory concerns.