Monthly Brief 2016/10 EN

Levy to be collected by the Independent Insurance Authority (IIA)

I am pleased to report that after months of discussion with the Financial Services and the Treasury Bureau (FSTB) and four rounds of industry consultation, we have a common position on all key issues including the implementation date, incremental levy rates and how to tackle life policies with general insurance elements (Circular Ref: Mv105/16).

We are extremely grateful for your valuable views and inputs. I would also like to thank FSTB for their readiness to listen to our views and find practical ways to address our concerns, particularly in respect of allowing insurers sufficient time to modify their systems in time for the levy collection to commence on 1 January 2018.

This underlines once again your Federation’s commitment to working closely with the Government and all stakeholders to ensure a smooth transition to the new IIA regime.

Cracking Down on Insurance Fraud Syndicate

I n August 2016, we received complaints from Member Companies on a bogus website selling motor insurance, particularly to high risk individuals, without proper licensing. We immediately reported this to the Commercial Crime Bureau (CCB) of the Hong Kong Police Force and Office of Commissioner of Insurance (OCI) and urged them to take appropriate actions. After two months of investigation, the CCB arrested four people for forging motor insurance cover notes, which might have been sold to over 700 car owners.

Thanks to the support of the CCB and the OCI, we were able to help crack down on this organised crime and prevent more car owners being victimised. We at the HKFI will continue to step up our efforts against insurance fraud through our established platforms with the law enforcement bodies.

Risk-based Capital (RBC) Framework

The OCI has recently commissioned a Consultancy Study on Formulation of RBC Rules for the industry and would develop a set of preliminary detailed rules and technical guidance for Quantitative Impact Studies (QIS) valuation methodology and QIS completion instructions. On this, they are engaging relevant stakeholders and have set up four Industry Focus Groups (IFGs) to work on specific areas.

HKFI was invited to nominate representatives of Member Companies to join the three IFGs on : Pillar 1 on Life Insurance, Pillar 1 on General Insurance and Pillar 2 on Own Risk and Solvency Assessment (ORSA) (Circular Mv100/16). In view of the overwhelming response, we requested the OCI to increase the nominations for each IFG from 12 to 15 and allow the sharing of information on a confidential basis.

The IFGs met for the first time on 24 October 2016 and will continue to provide professional support and expert advice to the OCI on this very important subject.

Young Insurance Executive Development Programme (YIE)

O n 6 October 2016, we organised the first “Speed Dating” for insurers and potential applicants who have expressed interest in pursuing a career in insurance. The event was well received by both groups and in particular, it helped attract young talents and offered them a good chance to better understand what insurance can offer as a promising, life-long career.

Going forward, we will continue exploring more efficient ways to bring young people into the industry and strengthen our talents pool.

Issue No.238 Oct 2016

M r Jimmy Poon of Dah Sing Life Assurance Company Limited was duly elected to fill a casual vacancy at the Life Insurance Council.

EAIC 2016 Conference

T he above conference was held in Macau earlier this month. I led the Hong Kong delegation of 100 and delivered the City Report at the Plenary Session. Ms Candy Yuen delivered a presentation on "Customer Centricity" while Mr David Alexander joined the panel discussion on "Ageing populations and health – The impact of the ageing population on life insurance operations". The next conference will be held in Manila in 2018 and we look forward to your continued support.

Membership News

Change of Authorised Representative

The Insurance Mini-carnival (【全民奪「保」挑戰賽】) held on 29 October 2016 was a resounding success. Participants fully enjoyed interactive games designed to highlight the importance of understanding and properly addressing various kinds of protection gap.

Chubb Life Insurance Company Limited (Life Member) - Ms Diana Kwan

Min Xin Insurance Company Limited (General Member) - Mr Chan Kwok Kwong

HKFI Membership

As at 31 Oct 2016, the HKFI has 91 General Insurance Members and 50 Life Insurance Members.

New Life Insurance Councillor HKFI Insurance Mini-carnival Ronnie Ng HKFI Chairman

Hong Kong as Asia’s Marine Insurance Hub

I am delighted to report that International Union of Marine Insurance (IUMI) is setting up its Asian hub in Hong Kong –its first permanent presence outside Europe in IUMI’s 142 year history.

This was formally announced by IUMI President Mr Dieter Berg at the 4th Asian Marine Insurance Conference coorganised by the HKFI and the Asia Insurance Review on 24 October 2016. The event was graced by the presence of Secretary for Transport and Housing Professor Anthony Cheung, Commissioner of Insurance Mr John Leung, IIA Chairman Dr Moses Cheng and Director of Marine Ms Maisie Cheng.

This exciting news is widely covered by local and international media. HKSAR Chief Executive Mr C Y Leung has also written a blog on this subject and given his words of encouragement on how Hong Kong can leverage on its strategic strength to become a maritime centre of excellence.

As IUMI’s Asian Hub, the HKFI will help promote marine insurance in the region and conduct quality training / conferences to upgrade the industry’s professional

standard. At the same time, the HKFI will help IUMI raise its profile in this part of the world and build a broader and stronger network.

As part of our continuous efforts to provide quality training on marine insurance, we have invited renowned scholar Professor Robert Merkin to conduct a talk on the two major legal developments, i.e. the Supreme Court’s decision on fraudulent claims and the Third Parties (Rights against Insurers) Act 2010, on 25 November 2016. His presentation will be followed by a panel discussion on “Strength of Hong Kong as world’s maritime centreIUMI’s Asian Hub, Belt & Road Initiatives and more” among marine insurance / legal experts. This will be held in conjunction with the first Hong Kong Maritime Industry Week organised by the Transport and Housing Bureau. Registration details for this CPD accredited talk will be available soon (3 CPD hours awarded under IIQAS and by the Law Society of Hong Kong).

T he prize presentation ceremony

cum gala dinner of the Hong Kong Insurance Awards 2016 was successfully held on 27 October 2016. The longawaited list of winners for the 15 categories was revealed. More than 370 guests including our distinguished panel of judges, the top three finalists, contestants and industry leaders gathered together to recognise and celebrate the outstanding performance and remarkable achievement of our industry.

Highlights of the joyous moments at this fabulous event are available at http://www.hkfi.org.hk/hkia/. We look forward to your continuous support and seeing you again at the Hong Kong Insurance Awards 2017!