New Insurance Authority (IA)
On 26 June 2017, the Insurance Authority officially replaced the Office of the Commissioner of Insurance as our industry’s regulator.
Last week we hosted a farewell lunch to thank the former Commissioner of Insurance Mr John Leung and his team of senior management for their support and contributions to the industry over the years. We look forward to closer collaboration with the new IA to safeguard the interests of policyholders and promote the sustainable growth of our insurance market.
As part of the migration to the new regulatory regime, the IA has recently issued two sets of guidelines, namely Guideline on "Fit & Proper" Criteria (GL4) & Guideline on Exercising Power to Impose Pecuniary Penalty in respect of Authorized Insurers (GL18). When finalizing the two GLs, the IA has taken into account HKFI’s comments. In particular, it provided more clarity on the transitional arrangements in respect of Key Persons in Control Functions under GL4.
On the proposed collection of policy levy for the IA, we have received considerable comments from Members on the second draft note. The relevant comments are being reviewed by the IA and Financial Services and the Treasury Bureau. Given the importance and complexity of this issue, we have requested and IA CEO Mr John Leung has kindly agreed to provide a help-desk, a set of FAQs and other relevant information at their website to help address questions from insurers. The IA has also undertaken to organize a briefing for our Members in the near future.
Medical Claims Statistics
T he Task Force on Health Care Reform, the Medical Insurance Association (MedIA) and individual insurers have been busy meeting the Food and Health Bureau (FHB) and its appointed consultants on VHIS consultancy studies.
At a media conference held on 6 June 2017, the MedIA released the 2015 set of medical claims statistics and provided an update on some significant market trends. Among other things, two key messages were highlighted for public information:
To bring Members up to date on the latest version of the VHIS framework and the objectives and deliverables of the consultancy studies, we invited the FHB and its consultants to conduct a briefing on 20 June 2017, which attracted a full house of 120 representatives from 45 Member Companies. Some of the key issues raised related to the product approval process, options of loading vs exclusion, tax incentive for policyholders, etc. We will maintain regular dialogue with the FHB and its consultants to help formulate a proper and commercially viable regulatory framework for VHIS.
Albeit the relatively stable average reimbursement ratio, policyholders should regularly review their benefit coverage to ensure it is sufficient to meet the rising medical expenses (medical cost inflation at about 6% to 13%).
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Medical expenses may triple or quadruple for colonoscopy and gastroscopy performed in the General Ward instead of an outpatient setting. Taking colonoscopy done in a clinic as an example, the insured will get from the insurer $91 for every $100 spent (i.e. patient paying the remaining balance of $9) while for the same procedure conducted in a hospital, the insured needs to pay $16 out-of-pocket.
Issue No.246 Jun 2017
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Equivalence Assessment Framework
Agreement on Solvency Regulatory Regime
We welcome the signing of the above agreement by the OCI and the China Insurance Regulatory Commission (CIRC) to conduct equivalence assessment on the insurance solvency regulatory regimes of the Mainland and Hong Kong. We appreciate the positive steps taken by the two regulators and believe that it will enable Hong Kong to provide a much wider spectrum of quality reinsurance services for the Mainland and help facilitate market development on both sides. The equivalence assessment is expected to be completed in four years’ time. The HKFI will provide our regulator with the necessary support to ensure timely completion of the exercise.
Establishment of an Insurance Claims Database for the Prevention of Fraud
We are glad to report that the Proof of Concept (PoC) exercise conducted by the project team has achieved very good results in that the suspicious cases of fraud identified are twice as many as the expected number. We presented the results to the core team overseeing this project in early June and received encouraging feedback.
A s a next step, we are revisiting and finalizing our legal framework for the database and will engage the relevant regulators accordingly. Stay tuned for more details in the coming months.
HKFI Smart Union 20,000+ Fans and Followers
Let's celebrate the great success of HKFI Smart Union ( 保聯同學會 ) Facebook Fan Page!
Our page has accumulated over 20,000 fans / followers and the number keeps growing literally everyday. We will continue stepping up efforts to make HKFI Smart Union a trusted public platform providing timely and informative posts on insurance.
More industry practitioners will appear in our Fanpage to share their engaging stories about insurance, a helping profession and a force for good. Don’t hesitate to contact us at communications@hkfi.org.hk if you have stories to share with our fans! And “Like” us now and become a member of the HKFI Smart Union!
Membership News
Change of Company Name
Holistic Consumer Protection Mechanism
F ollowing the industry consultation held in March 2017 on the draft amended Articles of Association (AoA) of the Insurance Claims Complaints Bureau (ICCB), we are pleased to note that the proposed amendments to the draft AoA have been approved by the Companies Registrar. The ICCB will hold a General Meeting on 27 July 2017 for passing a special resolution in adopting the new AoA. This will lay the ground for transforming the ICCB into the Insurance Complaints Bureau (ICB) with a view to providing a more effective one-stop service platform for resolving insurance-related complaints. Please mark this in your diary and join us in supporting and witnessing this historic transformation of the ICCB.
Hong Kong Insurance Awards 2017
The Hong Kong Insurance Awards 2017, officially launched on 1 June, has attracted enormous interest from industry members.
This year, we have introduced new categories and expanded the scope of entries to include consultancies, law firms and relevant service providers who are an integral part of the success of the industry. Details are available at the official website at www.hkfi.org.hk/hkia/. For enquiries, please contact SCMP’s Ms Zelma Cheung at 2565 2494 / 6100 7273 or at email zelma.cheung@scmp.com.
Send in your applications before the submission deadline on 31 July 2017. An Awards Presentation Ceremony cum Gala Dinner will be held on 26 October 2017 at the InterContinental hotel.
● Direct Asia Insurance (Hong Kong) Limited (General Member) to Well Link General Insurance
Change of Authorized Representative
● Dah Sing Life Assurance Company Limited (Life Member) – Ms Choi Wai Yee Paula
HKFI Membership
As at 30 Jun 2017, the HKFI has 88 General Insurance Members and 48 Life Insurance Members.
