February 2013 Issue No. 198
New Member Company
Our warmest welcome to Peak Reinsurance Company Limited for joining us as General Insurance Member!
HKFI Annual Reception 2013
The HKFI Annual Reception will be held on Tuesday, 16 April 2013 at 6:00 pm at the Garden Lounge of the Hong Kong Club. The Honourable Mrs Laura Cha, Member of the Executive Council and Chairman of the Financial Services Development Council, will be our principal Guest-of-Honour. We look forward to seeing you at the event.
Independence of the Insurance Authority (IIA)
On 5 February 2013 we submitted an industry position paper to the Financial Services and the Treasury Bureau (FSTB). In addition to presenting detailed comments on individual clauses of the legislative proposals, we have also provided an overview from both the industry and professional perspectives on the following six key areas:
- Regulatory powers on insurance companies
- Disciplinary sanctions on insurance intermediaries
- Representation at the Governing Board and Industry Advisory Committees
- Roles and Functions of the IIA
- Risk Based Capital
- Transitional Arrangement
A full version of our submission is available at www.hkfi.org.hk/en_media_20130205.html.
In essence, we support the proposed establishment of the IIA but have identified a number of areas where the policy objectives are not that clear and the related legislative wordings would require further clarity and refinement. On 26 February 2013, we met with senior officials of the FSTB and the Commissioner of Insurance to go over those areas and I am pleased to report that the discussion was positive and constructive. Going forward, we will step up dialogue with our stakeholders including the media and lawmakers to ensure that the final regulatory framework is sensible and practical.
Of late, we have met with the media and two Legislative Councillors - the Honourable Starry Lee, Chairman of the Panel of Financial Affairs, and the Honourable Yiu See Wing, Legco Member representing the tourism sector, which currently has 3,500 travel agents registered as insurance agents - to present and explain our industry's position.
2013 - 14 Budget
Though the Budget does not provide any tax incentive to help people take out medical insurance plans, we are pleased to learn that the Administration has reacted positively to our suggestion on building Hong Kong as a captive centre. We hope to see the reduction of profits tax help attract more enterprises to form captive insurance companies in Hong Kong.
Hot Air Balloon Accident in Egypt
First of all, we want to express our industry's deepest sympathy and condolences to the victims and their families. On knowing the tragic accident, we liaised with the insurers concerned to see what we could help. Also we kept
in touch with the FSTB, IA, Tourism Commission and Travel Industry Council to ensure the accurate flow of information regarding insurance coverage and the kind of follow up work being carried out by the insurers involved. The first priority at this point is to assist in the smooth and speedy repatriation of mortal remains of the victims back to Hong Kong.
Multiplier for Calculating Damages in Personal Injury Cases
The High Court has handed down the verdict of two personal injury cases in mid-February with revised multipliers. Instead of an universal discount rate at 4.5%, the High Court adopted a three-tier approach with 2.5% discount rate for claimants with future needs of more than 10 years, 1% for 5 to 10 years and -0.5% for less than 5 years.
Clearly this would have considerable impact on the claim costs which would need to be reflected in the premium rate. As to evaluating the potential impact of the adjusted rates of multiplier, we are planning to work with the Actuarial Society of Hong Kong to see what can be done to provide the industry with some indicative figures for reference.
Mission Well Community Project
The Junior Financial Secretaries conducted a poll among close to 2,200 teenagers on the top ten financial news in the Year of Dragon. They did a thorough analysis on the findings and presented the results at a media conference on 7 February 2013. For details, please visit the HKFI website (www.hkfi.org.hk/en_media_20130207.html).
Overseas Visitors
We have had the pleasure of receiving two delegations during the month. On 4 February 2013, senior officials from the Financial Regulatory Commission of Mongolia and the Consul General paid us a visit. Apart from exchanging information of the two markets, we have also briefly touched on the possibility of enhancing mutual exchanges in the future.
On 20 February 2013, a delegation from the General Insurance Association of Japan visited the HKFI. The focus of discussion was on the prevention of fraud and what could be done at the regional level to jointly address this longstanding industry problem.
On 2 February 2013, 26 teams from the insurance industry joined the Green Power Hike and competed for the HKFI Cup. Congratulations to Manulife (International) Limited on winning the 50 km race, Assicurazioni Generali S.p.A. - Hong Kong Branch the 25 km race and Sun Life Hong Kong Limited the 10 km race. The HKFI has helped raised a total of HK$312,000 for the charity event this time. Our special thanks go to the participating companies. Your generous support is deeply appreciated.
MEMBERSHIP NEWS
Change of Company Name
Crown Life Insurance Company has changed its name to The Canada Life Assurance Company. New/Change of Authorized Representatives
Peak Reinsurance Company Limited - Mr Franz Hahn
Transamerica Life (Bermuda) Limited - Mr Timothy P Oliver
HKFI Membership
As at 1 March 2013, the HKFI has 86 General Insurance Members and 42 Life Insurance Members.
Agnes Choi HKFI Chairman
Green Power Hike HKFI Cup 2013