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Enforcing Mainland judgment through insurance policies issued in Hong Kong


If one has no property or asset in Mainland China for Mainland judgment enforcement, is the enforcement possible against his/her insurance policy in Hong Kong?

To enforce a Mainland judgment in Hong Kong, it is required to first apply for “Registration in Hong Kong of Mainland Judgment and to obtain an Order from High Court” (Please refer to another article – Recognition and enforcement of Mainland judgments in Hong Kong” for more details.). Alternatively, it is also possible to commence fresh proceedings in Hong Kong and obtain a Hong Kong judgment ordering the judgment debtor to pay the damages.

Upon completion of any of the above, besides commencing winding-up proceedings after issuing statutory demands, there are also other methods of enforcement in accordance with Hong Kong law.

(1) Landed properties in Hong Kong
After applying for and successfully registering a Charging Order against the title of any relevant property listed in the Land Registry, it is possible to apply for an Order for Sale and to use the sale proceeds to satisfy the judgment debt.

(2) Shares
By applying for an Order for Sale after successful registration of a Charging Order against the judgment debtor’s shares held by securities companies, it is possible to liquidate the same. On the other hand, where such shares are of a private limited company and when its market capitalization is uncertain; enforcement could be more difficult.

(3) Goods
Another way of satisfying the judgment debt is to use the sale proceeds from selling the goods of the judgment debtor using a Writ of Fieri Facias (Writ of fifa).

(4) Bank deposits/court deposits/other receivables
Where the judgment debtor has bank deposits/ court deposits or other receivables that are held by third parties, it is possible to apply for a Garnishee Order ordering such third parties to bear the judgment debtor’s legal responsibility/ liability to the extent of the trust asset held by them; and to pay directly from the same to the judgment creditor.

In general, insurance does not fall into any of the abovenamed categories. There are rare instances where insurance policies may fall into the fourth category for Garnishee order mentioned above depending on its product type. 

For certain types of policy, there is no asset value if contributions are made by way of monthly payments. Examples for this type of product include medical insurance without any investment feature and travel insurance.

For investment-linked life insurance and any other insurance-linked assurance scheme where the policyholder is expected to receive a lump sum bonus after conclusion of the policy term, due to the fact that in most cases the policy has not yet reached maturity; as well as the fact that most policies expressly provide that such bonus is discretionary in nature and contingent to full compliance of all requirements in the policy even if maturity reached, Garnishee Order is generally inapplicable.

Nevertheless, existence of residual asset value in such policy irrespective of non-maturity or non-compliance is still possible. Where the judgment debtor is declared bankrupt / wound-up, the Official Receiver / Liquidator may exercise its statutory authority to liquidate the policy and include the proceeds as a part of the bankruptcy asset for satisfying outstanding claims by all existing creditors.

If the policy has matured and the bonus payment is confirmed without completion of the payment process, the judgment creditor may apply for a Garnishee Order against the same. Nevertheless, such payments are usually swiftly made to the associated bank account of the judgment debtor; and as such it is more practical to apply for a Garnishee Order against the recipient bank.

This article is written by the author according to his own understanding and practical experience. It is not a specific legal opinion or suggestion for a case. All lawyers, friends and readers, when encountering specific cases, please consult your specific case handling lawyers and take their opinions as the standard。