October 2012 Issue No. 194
Independence of the Insurance Authority (IA)
The Financial Services and the Treasury Bureau has released the legislative proposals for the establishment of the Independent IA on 26 October 2012 and is now conducting a 3-month public consultation.
We welcome the Administration’s positive response to our suggestion of a second round consultation. The Task Force on the Independence of IA has started work right away to formulate an industry response. In the process, it will consult our Member Companies and, where necessary, gather views from other industry bodies. We look forward to constructive dialogues with all stakeholders, including the Office of Commissioner of Insurance, to come up with a practical framework which protects consumers and help grow our industry.
Consultancy Study on Risk-based Capital (RBC) Framework for Insurance Business in Hong Kong
On 18 October 2012, the Task Force held a preliminary meeting with KPMG, consultant appointed by the IA for the above study. We were informed of the IA’s objectives and KPMG’s role in this exercise. We took the opportunity to express our views.
To establish an effective and efficient RBC framework for Hong Kong, a proper consultation process would be absolutely critical. All relevant stakeholders should be consulted and engaged throughout the process. In this connection, the Task Force has found two working groups to gather specific views from the life and general sides respectively. We are also planning to organize a joint briefing with the Actuarial Society of Hong Kong for Members. At the same time, we will work closely with the IA to try and obtain as much information as possible.
Personal Data (Privacy) (Amendment) Ordinance 2012 (Ordinance)
The amended Ordinance applies more stringent control and regulation of corporate data users on the use of customers’ personal data in direct marketing and the transfer/sale of such data to third parties. To assist our Member Companies to better understand the new legal requirements, the Task Force on Review of the Personal Data (Privacy) Ordinance organized a briefing on 9 October 2012. Lawyers from Kennedys provided a detailed account of the significant changes in the new rules. More than 180 representatives from Member Companies attended the briefing.
Commission Disclosure under the Prevention of Bribery Ordinance
After months of hard work and close liaison with the two brokers associations, the relevant Task Force has finalized a position paper based on the existing law and legal advice obtained. The Position Paper was released to Member Companies on 17 October 2012 and a briefing will be held next month to help Member Companies better understand the related disclosure requirements.
Insurance Protects the Public against Damages
The Fire Insurance Association conducted three surveys on the claim payments for damages caused by typhoons Doksuri, Vicenti and Kai-tai this summer. We collected statistics from 47 Members underwriting about 70% of the market portfolio. A total of 2,879 claims for compensation arising from the three typhoons were processed or settled. The gross compensation paid out totaled more than HK$135 million, which duly reflects the important social function performed by insurance in alleviating the economic burden of the insuring public against property damages resulting from natural hazards.
Smart Tips on MPF & Employee Choice Arrangement (ECA)
Every year, we publish an information booklet on one specific insurance product to educate the public on points to be aware of when procuring such insurance protection. So far, we have covered medical, travel, household and building, investment linked assurance schemes. With the launching of the ECA on 1 November 2012, we will be publishing a special booklet providing advice on how to manage one’s MPF. 150,000 copies of the educational
booklet will be made available through the Next Magazine . An interactive website on the same subject has also been launched at http://www.hkfi.org.hk/mpf_eca/.
Incidentally, Chairman of the Life Insurance Council Mr Roger Steel addressed the Asia Insurance Review’s Asia Conference on Pensions & Retirement Planning held on 15 October 2012.
Technical Associations’ Drink Party
On 12 October 2012, the four technical associations organized a social gathering for Members to network with government officials and trade bodies. Around 80 Members' representatives and guests participated in this joyful event this year.
Overseas Visitors
A group of investors from the UK’s funds management industry visited the HKFI on 24 October 2012. We provided them with an overview of the Hong Kong insurance market, growth prospect, distribution channels, expertise and competitive edge of this market.
Conference on Bancassurance
At the invitation of the General Insurance Agents Association of Hong Kong, Mr Allan Yu represented the HKFI at the above conference held in Shenzhen on 19 October 2012. Mr Yu briefed more than 100 practitioners from Hong Kong and Shenzhen on the development of and challenges faced by the Hong Kong’s bancassurance business.
26th East Asian Insurance Congress (EAIC) 2012
The four-day conference attracted more than 1,000 delegates, among which, 84 were from Hong Kong. Hong Kong’s Chief Delegate Mr Alex Chu and Life Insurance Council’s Chairman Mr Roger Steel addressed the audience.
The next EAIC Conference will be held in Taipei between 2 and 6 November 2014.
HKFI Membership
As at 31 October 2012, the HKFI has 87 General Insurance Members and 43 Life Insurance Members.
