2011 Extraordinary General Meeting (EGM) & Christmas Cocktail Party
As approved at the Extraordinary General Meeting held on 15 December 2011, membership subscription fees next year will remain unchanged. My sincere thanks to all of you for joining us at this year’s Christmas cocktail party.
Supplement VIII to CEPA
The signing of the above supplement last week allows Hong Kong insurance brokerage companies to set up wholly-owned insurance agency companies in Guangdong Province (including Shenzhen) on a pilot basis.
We welcome such development as it provides greater opportunities for local insurance professionals to establish business in the Mainland. It also helps facilitate the inter-flow of expertise between these two markets to the benefit of consumers.
Through the Hong Kong SAR Government, we will continue discussion with the relevant authorities in the Mainland to explore the possibilities of further liberalization measures for locally-based insurers under CEPA. Our proposals include lowering the threshold for Hong Kong insurers to conduct business in the Mainland and allowing Hong Kong insurers to provide post sales customer service in designated cities in the Guangdong Province on a pilot basis.
Legislative Council’s Motion Debate
On 15 December, the Legislative Council passed a motion on “Alleviating the difficulties on SME in taking out insurance”. In response, we issued a media release jointly with the Employees’ Compensation Insurance Residual Scheme (ECIRS) Bureau on the same day reiterating that we have in place the ECIRS to offer prompt assistance to such employers.
In this connection, we have met with Legislative Councillors and industry bodies of high risk groups to help improve the situation. So far the ECIRS has issued 30 policies mostly for scaffolding works. To help employers with cash flow problems, the Scheme is prepared to issue 6-month insurance policies instead of annual coverage.
As prudent insurers, we need to collect equitable and sufficient premiums. The premiums, therefore, should reflect the risk level. The recent market adjustment is the result of sustained loss experienced by insurers, particularly in the fields of scaffoldings, logistic, cleaning and recycling. And this is due to a combination of several factors, namely bad claims experience, under-declaration of wage roll and champerty and fraudulent claims.
Insurance Cover for Transport Sector
At the invitation of the Honourable Miriam Lau, Mr Harry Wong and Mr Ben Chung represented the HKFI at the two Joint Sub-committee meetings on the above subject under the Legislative Council in November and December 2011. We explained that the increase of premium for taxi and public light bus was the result of consistent adverse claims record, inadequacy of insurance premiums, rising trend of prolonged sick leave, etc.
Our industry representatives will join the next Sub-committee meeting on 19 January 2012 to further explain the problems we are facing and what we can do together with the public transport sector to explore viable solutions.
Battle against Insurance Fraud
I am pleased to report that the Commercial Crime Bureau (CCB) of the Hong Kong Police Force has officially set up an insurance fraud related focus group. It serves as a platform to centrally co-ordinate all sorts of insurance frauds referred by the HKFI. Initially, owing to the limitation of manpower resources, the focus group will mainly focus on traffic accidents related cases. In other words, they will attend to all fraud cases related to motor vehicles regardless of the amount involved. As for other fraudulent cases, the threshold requirement of HK$5 million still applies.
The Task Force on Insurance Scam will arrange a briefing early next year to familiarize Member Companies with the operation of this platform. We will also explore the feasibility of inviting the CCB to provide training to insurance companies on fraud detection and investigation.
Draft Guideline on Anti-money Laundering and Counter-terrorist Financing
We provided the Insurance Authority (IA) with detailed comments particularly on technical aspects of the above Guideline. In addition, we suggested the IA to allow a one-year transitional period for system changes and implementation. We also stressed the importance of proactive education to the public of the key principles and requirements of anti-money laundering.
Enhanced Investment-linked (IL) Long Term Insurance Examination
Member Companies are reminded that the transitional period for the above examination under the Insurance Intermediaries Quality Assurance Scheme will expire on 29 February 2012. Serving insurance intermediaries who wish to continue to sell ILAS products from 1 March 2012 onwards must either pass the new IL Paper or comply with the extra CPD Requirement before the above deadline. For details, please refer to Circular Ref: Mv102/11.
Visitors
A delegation of 23 from the Beijing Insurance Association visited the HKFI on 1 December to learn more about our New Insurance Mediation Pilot Scheme (NIMPS) and alternate disputes resolution mechanism. A vote of thank to Ms Kelly Wong, Member of the NIMPS Committee, for her in-depth and interesting presentation on the operation of the mediation scheme.
Season’s Greetings
At this festive time, may I wish you all a very Merry Christmas and a Prosperous 2012!
As at 20 December 2011, the HKFI has 87 General Insurance Members and 42 Life Insurance Members.
