Independence of Insurance Authority (IIA)
On 5 July 2013, the Panel of Financial Affairs of the Legislative Council (Legco) will discuss the consultation conclusions on key legislative proposals regarding the IIA. We are pleased to note that the Financial Services and the Treasury Bureau has responded positively to some of our comments and concerns. And some relating to the regulatory powers over insurance companies, disciplinary sanction on intermediaries, etc remain unresolved.
We will provide a submission to the Legco setting out clearly our positions and recommendations on those outstanding issues to ensure an informed discussion on how best to regulate and develop our industry.
Health Care Reform
A lot has happened during the past month. Our representatives took part in various Food and Health Bureau (FHB) meetings on Health Protection Scheme (HPS). The Subcommittee on HPS under the Legco's Panel on Health Services has also convened a meeting on 4 June to discuss the Government's proposal. We keep driving home our key message that for HPS to succeed, the following fundamental operating principles must be properly addressed:
1. Customers must have choices. Medical insurers should be allowed to sell products, along side those which are HPS compliant;
2. There must be due transparency on both insurance premiums and fees charged by doctors and hospitals. Withholding the implementation of a DRG/Packaged Pricing specific to HPS would go against the objective of empowering consumers to make an informed choice.
3. Guaranteed Acceptance must be supplemented by a High Risk Pool fully funded by the Government;
4. Premium for HPS will be at least 10% higher than the current rate. Forced migration may lead to employers reducing/scrapping medical benefits for their employees.
Policyholders Protection Fund (PPF)
As reported here before, we have written at length to the Commissioner of Insurance registering our grave concerns on the proposed PPF. To ensure Member Companies are fully aware of the potential risks generated by the PPF in the way it is currently structured, we will organize a briefing in early July. Authorized Representatives are strongly encouraged to attend. For details, please refer to Circular Ref: Mv065/13.
Consultancy Study on Risk-Based Capital (RBC) Framework
The Task Force and the IA have met for the first time to share views on the above subject. A raft of issues have been discussed, which included the objectives for the new RBC requirement, the roadmap and timeline for the study, the implementation approach, communication strategy, etc. RBC is a very important subject affecting the business landscape of both general and life insurance, we will liaise closely with the IA and keep Members fully in the picture going forward.
Enhanced Customer Protection on ILAS
To facilitate Member Companies' compliance with the upgraded consumer protection initiatives, the Life Insurance Council (LIC), with input from the IA, has published a set of FAQ. Among others, the document provides an illustration of an acceptable industry norm for remuneration disclosure. To synchronize with
implementation of the new requirements, the LIC has updated the informational pamphlet "Questions you need to ask before taking out an ILAS product". The latest version is now available online for Members to download.
To help insurance brokers better understand the new requirements, LIC participated in a forum organized by Professional Insurance Brokers Association on 25 June 2013.
US Foreign Account Tax Compliance Act (FATCA)
A Joint Industry FATCA Seminar was held on 24 June 2013 for members of the Hong Kong Investment Funds Association, the Hong Kong Trustees' Association, the Hong Kong Association of Banks and the HKFI. The second of its kind, this seminar attracted more than 1,000 practitioners from the four organizations. It provided a timely and comprehensive update on the present status of FATCA and how we should get prepared for the implementation FATCA with the registration process commencing this coming July.
HKFI 25th Anniversary
The celebration activities for our silver jubilee are well underway.
"Kids Day Out for Fun and Charity" will be held on 6 July 2013 at the Wanchai Sports Ground. Hundreds of families are participating in this athletic game for their children aged under 10. Don't miss out the fun and sign up now at http://www. roadshow.hk/hkfisd/!
Another important initiative in celebration of our 25th anniversary is the make-over of the HKFI website. The revamped website will incorporate new technologies and mobile elements to meet the changing needs of our stakeholders.
The highlight of the commemorative programmes, of course, will be the Gala Dinner to be held on 8 August 2013 at Conrad Hong Kong. The Honourable John Tsang, GBM, JP, Financial Secretary, will officiate at this memorable occasion. If you have not yet subscribed for a table, please do so before seats are sold out. (Circular Ref: TL/SL/ sl-13-027).
Visitors
A senior delegation from China Insurance Regulatory Commission visited Hong Kong in mid-June. We gave them a detailed presentation on the current selfregulatory regime and the work of the HKFI on consumer protection and professional standard.
Coincidentally, we have also received a group of university students joining the
Pilot Scheme for Crossborder Study Tour for Postsecondary Financial Talents
this summer. A total of 26 local undergraduates under the Scheme will be duly trained and assume the role as Hong Kong's “financial ambassadors” during their stay in Shanghai. To beef up their understanding of our insurance market, we conducted a familiarization programme for them on 4 June 2013.
Insurance School of Japan (ISJ)
We were invited by the General Insurance Association of Japan to participate in the 23rd Advanced Course of the ISJ. After a thorough selection process, Mr Jonathan Yau of Chevalier Insurance Company Limited and Mr Lawrence Cheng of Peak Reinsurance Company Limited were nominated by the HKFI to participate in this prestigious training programme.
Thomas Lee HKFI Chairman
As at 28 June 2013, the HKFI has 86 General Insurance Members and 42 Life Insurance Members.
