Monthly Brief 2011/07 EN

Health Care Reform

On 11 July 2011, the Food and Health Bureau released the outcome of the second-stage public consultation on the proposed health care reform. We conducted a media conference that afternoon to make initial response. HKFI representatives attended several TV programmes on the following days to further explain the industry’s position to the public.

As a next step forward, we will continue to work closely and proactively with the Government to help ensure that the scheme is practical, efficient, actuarially sound and commercially viable, whilst providing a positive health insurance solution to the people of Hong Kong.

Mr David Alexander, Chairman of the Task Force on Health Care Reform, will represent the HKFI at the special meeting of the Legislative Council’s Panel on Health Services on 8 August 2011 to reafﬁrm our stance.

Proposed Independence of the Insurance Authority (IIA)

Following the Government’s release of the consultation conclusions on 24 June 2011, the Task Force on IIA met to review the latest developments and what we should do next.

In addition, the Governing Committee met with Professor the Honourable K C Chan, Secretary for Financial Services and the Treasury, and his team for an exchange of views on the way forward.

Among other things, we suggested the establishment of a working group led by the Insurance Authority (IA) to manage the transition from IA to IIA. On this, we are awaiting Government’s response.

Proposed Establishment of a Policyholders’ Protection Fund (PPF)

The Task Force on PPF has forwarded to the Financial Services and the Treasury Bureau (FSTB) the consolidated comments from Member Companies. Basically, we fully support the establishment of a PPF and endorse most of the recommendations made by the Government. We nevertheless highlighted some technical points and recommended options for the consideration of the Administration. They include clariﬁcation on which insurance classes are to be included in the PPF, exclusion of SMEs as in the case for most jurisdictions overseas which only cover natural persons, elucidation on what is to be covered by PPF, Motor Insurers’ Bureau of Hong Kong and Employee Compensation Insurer Insolvency Bureau, and the investment of PPF to maximize returns, etc.

How to Help Develop Hong Kong into a Maritime Centre –from the Insurance Perspective

The above Task Force has commissioned the Centre for Transport, Trade and Financial Studies of the City University of Hong Kong and the One Country Two Systems Research Institute to conduct a consultancy study on “How to Position Hong Kong as a Maritime Centre for the Asia Pacific Region”. The research exercise will start soon and the ﬁnalized report is expected to be completed by the end of this year, which will then be forwarded to the Government for consideration in early 2012.

2011

July

Issue No. 181

Mandatory Provident Fund (MPF) Schemes

The MPF Schemes Authority (MPFA) has recently suggested allowing early withdrawal of 20% to 30% of MPF accrued benefits under five specified circumstances.

Our initial view is that the objective of the MPF is for retirement saving. Considering the fact that the current average asset size of accrued beneﬁts per MPF member is less than HK$150,000, any premature withdrawal will seriously undermine the retirement protection of individual members and ultimately alter the initial philosophy of the MPF scheme. In addition, trustees will have to allocate more time and resources in assessing and approving such applications. That will inevitably incur extra administration costs.

As regards the MPFA’s plan to conduct a consultancy study on trustees' administration costs and the feasibility study of setting up a central database to facilitate "MPF Full Portability", the Retirement Schemes Working Group will review the proposals and prepare an industry response once more details are available.

HKFI Annual Report 2010/2011

Members should have received by now the latest Annual Report. Presented in vivid colours, the report provides a summary of what have been accomplished in the areas of communicating with stakeholders, upholding professionalism and contributing to the community as good corporate citizens. It also highlights our works in respect of the latest market development, insurance agent administration, public education and publicity during the period under review.

Mission Well Community Project Appoints Junior Financial Secretaries

After rounds of challenging selection process, 22 teenagers in Form 3 and Form 4 have been chosen to be the second batch of “Junior Financial Secretaries (JFS)” under the Mission Well Community Project. An Inauguration Swearing-In Ceremony was held on 15 July 2011. These youngsters will receive intensive and multi-faceted training to enhance their financial literacy and develop proper attitudes towards life. They attended the sharing session hosted at the HKFI office where they learned more about the industry and the function of the HKFI.

They will be taking up the important role of promoting positive financial and life planning concepts among their peers and to the public via various channels. The ﬁrst batch of JFS has participated in more than 40 media interviews, school talks, road shows and public events promoting ﬁnancial literacy to over 10,000 participants during the past year. We hope the new JFS will help bring the important message of proper life planning to the wider public.

Summer Greetings

In view of the summer holiday, the next issue of the Monthly Brief will be published in September 2011. Wishing you all a relaxing and refreshing summer break!