Meeting the Media
On 15 June 2011, HKFI Deputy Chairman Ms Agnes Choi, General Insurance Council (GIC) Chairman Mr Jimmy Poon, Life Insurance Council Chairman Mr Thomas Lee and I met with a group of journalists from the local printed media. We briefed them on the work and challenges of the HKFI and the latest market situation. The subsequent media coverage was generally very positive. We will continue to communicate with the mass media through various channels.
Proposed Independence of the Insurance Authority (IA)
On 24 June 2011, the Financial Services and the Treasury Bureau announced the consultation conclusions and the proposed way forward. We issued a press statement on the same day to reaffirm our support in principle of the proposed independence of the IA which would help strengthen the present regulatory regime and be good for the healthy development of the insurance industry in the long term.
In addition, we reiterated the importance for the Government to conduct a second round consultation with the industry on details of the proposed changes. Specifically, we are concerned about the way in which the industry can participate in the future Governing Board of the proposed independent IA. Also, it is necessary to set out clearly how the banking channels are to be regulated to ensure supervisory consistency and a level playing field for all insurance intermediaries.
The relevant task force headed by Mr Allan Yu will look into all this and further consult Member Companies accordingly.
Disclosure of Intermediaries’ Remuneration
A task force headed by Ms Agnes Choi has reviewed this subject in the context of the Prevention of Bribery Ordinance (PBO) as it applies to commission disclosure by insurance brokers. Based on legal advice, we have drafted a template of declaration for Members’ reference. The draft template is being reviewed by the IA. And we aim to issue it to Member Companies and brokers’ bodies together with the relevant legal advice by early July.
General Insurance Travel Industry Council of Hong Kong’s New Rules on Refunds for Trip Cancellations
We had a meeting with the Travel Industry Council of Hong Kong (TIC) on 14 June 2011 to express our serious concerns about their new rules regarding refunds for trip cancellations (Directives No 177 and 203). We drew to their attention the obvious gap between the perils leading to trip cancellations as classified by the TIC and what insurance can do to provide suitable coverage.
I am pleased to report that we reached a common understanding with the TIC that:
• not all of the situations referred to under the new rules could be covered by insurance;
• travel operators would continue, where necessary, to try and seek recovery of funds from transport service providers, i.e., airlines, cruise liners and train companies, on behalf of consumers in line with the existing practice; and
• in the longer term, the TIC will step up its dialogue with service providers to establish a proper and transparent refund mechanism to protect the interests of consumers.
Smart Tips on Travel Insurance
We published 150,000 copies of the above pamphlet with the Next Magazine this week. This information pamphlet is part of our continuous efforts to enhance public’s understanding of the nature and characteristics of travel insurance and the essential points to look out for when taking out cover under such policy.
On the HKFI website, there is now an interactive webpage providing related information online.
Marine Insurance
Ms Agnes Choi is the Chairman of the Task Force on How to Help Develop Hong Kong into a Maritime Centre – from the Insurance Perspective set up by the GIC. On 30 and 31 May 2011, Ms Choi joined a shipping delegation led by the Secretary for Transport and Housing the Hon Eva Cheng to South Korea to promote Hong Kong as an international maritime centre and a premier hub port. At the seminar, Ms Choi made a presentation to highlight the ideal position of Hong Kong to address and manage maritime risks.
A one-day seminar entitled “Managing the Logistics Transportation Challenges in China & Hong Kong” was successfully held on 25 June 2011 at the Polytechnic University. More than 100 insurance practitioners joined this first ever CPD course organized by the Marine Insurance Association (MIA).
On 10 June 2011, we joined the Cheque Presentation Ceremony of the Hong Kong Maritime Law Scholarship Scheme hosted by the City University of Hong Kong. We were delighted to share the joy of Mr Larry Kwok, Committee Member of the MIA, for being awarded this scholarship sponsored by the Hong Kong Maritime Industry Council.
Life Insurance Mandatory Provident Fund Schemes (MPF)
Professor the Hon K C Chan, Secretary for Financial Services and the Treasury, announced at the Legislative Council last week that the annual average return rate of the MPF System since its implementation in 2000 is, net of fees and charges, 5.4%. The overall return of the MPF System has been higher than the annualized inflation rate of 0.8% and the average return of any single fund type has not been lower than the inflation rate. All in all, the MPF System has played a positive role in strengthening the retirement protection for the Hong Kong citizens.
These are encouraging facts and figures, and we will explore ways to communicate such messages to the wider public. On MPF fees adjustment, we believe that it should be best achieved through market competition and reduction of compliance costs.
Pacific Insurance Conference (PIC) 2011
The 25th PIC will be held in Singapore between 11 and 14 September 2011. This year, the theme is “Back from the Brink: Seizing Today’s Opportunities; Conquering Tomorrow’s Challenges”.
A cocktail was held in mid-June where the PIC Chairman Mr Mel Gottlieb and other PIC Directors met with local life insurers and introduced to them this international forum. For more details, please visit the conference website at: www.pacificinsuranceconference.org/theconference/.
