Insurance Fraud Prevention Claims Database (DB)
We are pleased to report that the Steering Committee (STC) overseeing the development and administration of the DB was officially formed and held its first meeting on 26 January 2018. The STC consists of eight members with the majority coming from outside the industry:
Chairman
Non industry members
Mr Edward Chan King Sang, SC, JP
Professor Chan Wai Sum
Mr Allan Chiang, SBS
Mr Fred Li Wah Ming, SBS, JP
Dr Laurence Shek Siu Lam
Mr Simon Wong Kwong Yeung
Industry members
Mr Praveen Daswani
Mr Jimmy Poon Wing Fai
With the support and guidance from the STC, the Project Team is finalizing the privacy by design proposal. Once it is endorsed by the STC, we will invite members to a briefing session on details of onboarding and operation of the database. We are on target to start operating the system initially for three business lines, i.e. motor, medical and personal accidents, by Q3 2018.
Inauguration of Insurance Complaints Bureau
A nother important milestone for the industry is the inauguration of the Insurance Complaints Bureau (ICB) on 16 January 2018. The ICB, which supersedes the Insurance Claims Complaints Bureau (ICCB) founded 28 years ago, is the outcome of a holistic review by the industry to improve its consumer protection framework. Specifically, the new ICB will provide consumers with a one-stop, convenient, effective and easily accessible platform in helping resolve all insurance-related disputes of monetary value.
The revamped ICB has a new governance structure with a majority of non-industry members forming the Board of Directors to enhance its independence:
Chairman
Non industry members
Industry members
Mrs Pamela Chan Wong Shui, BBS, JP
Mr Herbert H K Tsoi, BBS, JP
Mr Paul F Winkelmann
Prof Paul S F Yip
Mr Stuart Harrison, HKFI Chairman
Mr P L Chan, HKFI Deputy Chairman
Mr Mike S C Lee
Disputes related to claims, as in the past, are handled by way of adjudication. This well-established adjudication service will continue to be provided by the Insurance Claims Complaints Panel comprising a majority of nonindustry members and chaired by Mr Michael Tsui. As for complaints not related to claims but with monetary value, the ICB will introduce a new mediation service in Q2 2018. Both the adjudication and the mediation services will be offered to consumers free of charge.
T o ensure Members are aware of the key features of the draft Code of Practice under the Ambit of VHIS (CoP), we invited the Food and Health Bureau (FHB) and its consultants to conduct a briefing on 9 January 2018. The session was well attended by 100 plus representatives from 38 Member Companies.
Direct Licensing Regime of the IA
T he above regime is expected to come into effect in mid2019. The relevant guidelines are now being drafted and we have duly consulted our Members and reflected their views to the IA particularly on the respective items concerning fit and proper criteria, CPD training and acting in the best interest of customers. We are now awaiting feedback from the IA.
On regulated activities related to salaried staff, we have submitted a back office vs front office framework to the IA back in September 2017. Our latest understanding is that IA is preparing an FAQ to help clarify the outstanding issues raised by HKFI in September 2017.
Members unanimously queried the need for such an over-prescriptive draft CoP and found it a blatant deviation from the long standing principle-based regulatory approach. Based on the feedback from Members, we have revised the CoP accordingly to provide greater clarity, make it simpler and easier to comprehend and help ensure it is fit for purpose. This revised draft together with detailed comments received from Members were submitted to the FHB and the Insurance Authority (IA) for consideration.
Going forward, we will continue our constructive dialogue with the FHB and IA with a view to establishing a practical regulatory framework for VHIS with IA as the key industry regulator.
Digitizing motor cover note
O n 31 January 2018, we had a meeting with the IA, Transport Department and the Police Force to brief them on the proposed application of blockchain technology in the issue of motor cover note. Based on the comments and positive response received at the meeting, we will start engaging member motor insurers to bring this InsurTech project forward.
Policyholders’ Protection Schemes (PPS)
A t the two briefings conducted by the IA and the Financial Services and the Treasury Bureau (FSTB) this January, Members were introduced to details of the proposed General Insurance (GI) and Life Insurance (LI) schemes. LI Members expressed grave concerns about the unintended consequences of adopting a custodian trust approach and GI Members remained concerned about some outstanding issues including definition of Small and medium-sized enterprise and refund of premium.
According to FSTB, a legislative brief will be presented to the Legislative Council (LegCo) in Q1 2018. The draft Bill is expected to be introduced to the LegCo before end of 2018. We appeal to all Member Companies to send in comments on the proposed PPS before 9 February 2018 (Circular Rev: Mv119/17, Mv121/17).
International Financial Reporting Standard 17 – Insurance Contracts (IFRS 17)
T he Hong Kong Institute of Chartered Public Accountants (HKICPA) announced through its industry letter that IFRS 17 would be implemented in Hong Kong with effect from 1 January 2021.
At the meeting held earlier this month, HKFI conveyed Members’ serious concerns about the potential gap between Hong Kong and other jurisdiction in terms of the implementation timeline. Another key concern is the apparent lack of actuarial support for a number of insurers in Hong Kong. HKICPA undertook to continue monitoring and assessing international and Hong Kong developments and form a Hong Kong Insurance Implementation Support Group to provide insurers with the necessary assistance. Members also raised similar concerns at the HKICPA’s CFO Forum held on 29 January 2018. We will continue to liaise with HKICPA and update Members on the way forward.
