HONG KONG--(BUSINESS WIRE)--#insurance--AM Best has placed under review with positive implications the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of �a-� (Excellent) of CMB Wing Lung Insurance Company Limited (CMBWLI) (Hong Kong).

This rating action follows an announcement on 28 September 2022 by China Merchants Bank Company Limited (CMB) that CMBWLI will merge its business with China Merchants Insurance Company Limited (CMI). According to the business transfer agreement, CMI will transfer its general insurance business (including assets and liabilities related to the business) to CMBWLI, which will then issue 9,856,066 of its shares to CMI. As a result, CMI will directly own 25.37% of CMBWLI�s enlarged share capital, and CMB will indirectly hold 74.63% of the shares of CMBWLI. The business acquisition and new issue of shares are subject to approval by the Insurance Authority (IA) of Hong Kong, and will take place within 60 days of its approval. Subsequently, CMI will distribute all of its shares in CMBWLI to China Merchants Insurance Holdings (CMIH) and apply to the IA to withdraw its authorisation to carry on general insurance business.

In addition, CMIH entered into a share subscription agreement with CMBWLI on 28 September 2022 to acquire 25,590,806 of CMBWLI�s new shares at a cash amount of HKD 1,171 million. Upon completion of the above transactions, CMIH will become the majority shareholder of CMBWLI by directly holding 55% of its enlarged share capital, while CMB will indirectly own the remaining 45% of the shares. The ultimate parent of CMBWLI will change from CMB to China Merchants Group Limited (CMG). The capital injection and aforementioned change in shareholders will take place within 60 days upon IA�s regulatory approval. The under review with positive implications status reflects the potential strengthening of CMBWLI's balance sheet given the planned capital injection from the new majority shareholder, as well as enhanced ERM from leveraging CMG's resources and risk management practices. The ratings are expected to remain under review until the transactions close and AM Best completes its evaluation of the impact of the merger on CMBWLI�s rating fundamentals, as well as the level of parental support CMBWLI will receive. The under review status may be updated in the interim period as new facts and circumstances emerge.

Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.

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