Monthly Brief 2015/12 EN

2015 Extraordinary General Meeting (EGM)

The EGM held on 16 December 2015 approved a 5% increment of membership subscription fees for 2016. This is the first time we have increased the fee level since 2009. With this, the HKFI will be better resourced to deal with the many industry issues we are facing. Also, the insurance agents registration fee will be increased by 5% from $410 to $430.

Establishment of a Centralised Claims Database for the Prevention of Fraud

I am pleased to report that we have selected the consultant to conduct a feasibility study and help address the related privacy issues for this very important project. The study is expected to take eight months to complete and we will keep you posted on progress.

Voluntary Health Insurance Scheme (VHIS)

T he Task Force on Health Care Reform had a constructive meeting with the Food and Health Bureau (FHB) last month expressing the industry’s concerns over some of the specific proposals. We are glad to note that the FHB has taken into account our valid and legitimate concerns, refined the proposed VHIS Framework, and thus making it more practicable and viable.

One noteworthy point is that the FHB proposed to launch the VHIS through a market agreement among all medical insurance providers. Whilst we are supportive of the idea in principle, we are mindful of related concerns expressed by the Competition Commission. On this, we have referred the matter to the FHB for advice on the proper way forward.

For a better understanding of the revised VHIS Framework and related issues concerning market agreement and competition law compliance, we will invite FHB to conduct a briefing for Members by early 2016.

Change of Office Bearers

Following the resignation of Mr Andy Robinson from the Life Insurance Council (LIC), Mr Lennard Yong and Mr Stuart Harrison have taken up the chairmanship and deputy chairmanship of the LIC respectively. A by-election is now being conducted to fill the casual vacancy.

A vote of thanks to Mr Robinson for his remarkable contribution to the LIC and the HKFI in the past years.

Public Liability Insurance for Licensed Hotels and Guesthouses

T he Home Affairs Department (HAD) has adopted our suggestion of including the procurement of third party liability insurance as one of the licensing conditions of Hotels and Guesthouses, instead of doing it through legislation. The new licensing requirements will take effect from 28 December 2015.

To assist HAD in promoting this to operators and help hotels and guesthouses to obtain the relevant insurance cover, we have uploaded a list of General Insurance Members authorized to write such business to our website (http://www.hkfi.org.hk/#!/ about-the-hkfi/member-list). Our representatives will also conduct seminars and briefings on the procurement of the relevant insurance for the hotel and guesthouse operators in the coming months.

Issue No.229 Dec 2015

Life Insurance Council

Competition Law

Before the Competition Ordinance coming into full force on 14 December 2015, we did a number of things including:

(a) HKFI’s internal practices - Reviewed those practices with the aid of our legal counsel and sought to make the required changes in compliance with the law;

(b) No Claims Discount (NCD) - Removed the recommended NCD discount scale from the standard motor insurance policies, thus giving individual motor insurers total discretion in setting their NCD rates;

(c) Standard policies for compulsory classes of insurance - Removed the standard insurance policies from the HKFI website for the time being and advised Member Companies to observe the “overriding conditions” should they wish to use/adopt some of the wordings. These policy specimens were developed essentially to help administer the relevant statutory minimum requirements and provide more clarity for the benefit of the insuring public. That said, we will review the relevant standard policy terms in the context of the Competition Ordinance and make appropriate changes accordingly;

(d) Liaison with regulators - Met the Competition Commission and the Insurance Authority (IA) respectively for an exchange of views on the issues above as well as potential concerns over the registration of agents.

We are committed to doing what is needed to ensure full compliance with the Competition Ordinance. Going forward, we will conduct further review of HKFI’s operations and practices and make changes as appropriate and necessary.

Courtesy Visit in Shanghai

At their invitation, a small HKFI delegation visited the Shanghai Insurance Exchange on 10 and 11 December 2015 and met the following authorities and organisations:

● CIRC Shanghai Bureau

● Shanghai Free Trade Zone Office (FTZ)

● Shanghai Insurance Exchange (SIE)

● Shanghai Municipal Financial Service Office

● Shanghai Insurance Association

Apart from building a closer working relation with the Shanghai authorities, the purpose of this trip

was to learn more about the SIE, the brand new insurance platform recently endorsed by the Central Government.

We also took the opportunity to explore business opportunities for Hong Kong insurers in the Pudong FTZ and strengthen liaison with our counterparts in Shanghai.

Consultancy Report “From Compensation to Rehabilitation – A Social Review of the Employees’ Compensation (EC) Insurance System in Hong Kong”

T he EC Insurance Residual Scheme Bureau commissioned the University of Hong Kong's (HKU) Department of Social Work and Social Administration to conduct the above study. The key study findings were announced in a media conference conducted by HKU on 14 December 2015. In the report, the consultant has pointed out two major challenges in the current EC systemcompensation-focused culture and barriers for Return-To-Work (RTW) experienced by workers.

The Multidisciplinary Orthopedics Rehabilitation Empowerment (MORE) programme, led by the Department of Orthopaedics and Traumatology of the Chinese University of Hong Kong, was cited as a successful example to substantially improve the rate of RTW, shorten the time required for RTW and decrease the impact of medical postponement by having early diagnosis, prompt case management, timely and effective rehabilitation for injured workers, with emphasis on RTW and functional restoration.

As a next step, we will liaise with the relevant Government departments and stakeholders to discuss how best the recommendations in the report can be implemented for the benefit of workers and the entire society of Hong Kong.

2015 Christmas Cocktail Party

Our traditional year-end cocktail party was held on 16 December 2015. Please visit http://www.hkfi.org.hk/#!/ about-the-hkfi/album/191 for viewing the happy moments that evening.