The Participating Business Committee (“PBC”) is established in accordance with the Guideline on Governance and Management of Fund(s) of Participating Business (GL34) issued by the Insurance Authority. PBC provides independent and objective advice to the Board of Directors (“Board”) of Prudential Hong Kong Limited (“PHKL”) on key matters relating to the management of participating funds, including but not limited to the allocation of distributable surplus/profits and declaration of dividends/bonuses. In providing its advice, the PBC should consider the principle of fair treatment of customers, equitable balance between shareholders and policy holders, and among different groups of policy holders.

At least half of the PBC members (including the Chairperson) are independent of PHKL. The PBC should also include members with an adequate spread of skills, knowledge and relevant experience to discharge its duties effectively.

At a minimum, the PBC should consider the following key matters in advising the Board:

  1. whether the level of future discretionary benefits provided in the benefit illustration is clear, fair and reasonably achievable;
  2. the policy and mechanism for allocation of distributable surplus/profits and dividends/bonuses declaration mechanism (including any smoothing mechanisms), taking into account reasonable expectations of policy holders (including but not limited to their expectations relating to reasonable achievement of discretionary benefits), fairness and equity, as well as sustainability;
  3. fairness, equity and reasonableness in allocation of expenses and charges to and within participating funds;
  4. the risk and investment profile of participating funds, including the appropriateness of the risk appetite and risk level taken, the management and reasonable balance of risk and return, etc.;
  5. the impact of any management actions planned or implemented;
  6. PHKL’s strategy for future sales of insurance policies in participating funds and their impact on surplus;
  7. the use, purpose, and terms of any shareholder capital support to a participating fund;
  8. PHKL’s communications with existing and potential policy holders relating to participating funds, including fairness and transparency of disclosed information which may affect policy holders’ decisions; and
  9. any other issues which PHKL or the PBC considers appropriate in relation to PHKL’s management of its participating fund.