Change of HKFI’s Articles of Association (AoA)
At its meeting held on 25 June, the Governing Committee endorsed the proposed amendments on the HKFI’s Articles of Association (AoA) to:
(a) remove the powers and functions of the Insurance Agents Registration Board (IARB), Appeals Tribunal and any self-regulatory functions from 23 September 2019 onwards;
(b) align the AoA with the new Companies Ordinance (Cap. 622) which came into effect on 3 March 2014;
(c) allow more flexibility for HKFI to perform new roles and functions, including forming partnership with external parties, setting up subsidiaries and conducting profit gaining businesses.
This is an important and necessary step for HKFI to reposition itself in preparation for the post-SRO era. The revised draft AoA is being circulated to Members for review. On this we look forward to your feedback and support (Circular Ref: Mv064/19).
Medical Insurance
Commencement of IA’s Direct Licensing Regime
I n the run-up to 23 September 2019, we are working closely with the Insurance Authority (IA) on a raft of industry consultations concerning four draft guidelines on life insurance. The turnaround time is short but we hope Life Insurance Members (LIMs) can respond and provide comments and feedback by the deadline this week (Circular Ref: Mv060/19, Mv062/19).
We are making good progress on all aspects of the transition. So far, we have conducted six rounds of productive working meeting with the IA and we are getting fairly close to completing all major items of the work required. Our next focus is on the handing over of outstanding complaint and appeal cases from the IARB to the new regime.
Meanwhile, IA is conducting a market survey of insurance agencies registered with the IARB. Please remind your appointed agencies, if any, to respond to the survey on time.
We conducted a Members’ consultation on IA’s Draft Guideline on Medical Insurance Business (GL on MIB) in January 2019. And we are pleased to note that many of our suggestions have been accepted and incorporated in the latest draft produced by IA. We are now seeking Members’ further comments on this revised version (Circular Ref: Mv061/19).
Following the official launch of the Voluntary Health Insurance Scheme (VHIS), we have been meeting the relevant Food and Health Bureau (FHB) officials regularly to review progress and identify areas for improvement.
Apart from beefing up data reporting, we have agreed on the need to standardize the underwriting questionnaires for VHIS products.This is also an area which the Medical Insurance Association (MedIA) has chosen to be a top priority work item this year. We are currently reviewing the related common underwriting questions in the medical insurance market. We hope to provide a set of standardized questions in layman terms so that policy applicants will find it easier to understand and respond. The dedicated team under the MedIA aims to come up with the first draft before Q4 2019 and will consult Members thereafter.
Development of Risk-Based Capital (RBC) Regime
Prior to the third Quantitative Impact Study (QIS 3), the IA is conducting a Pilot Test, namely QIS 2.5, using a representative sample of life insurance companies. On this the Life Insurance Council (LIC) is collecting LIMs’ views and will prepare an industry submission supported by robust quantitative analysis.
On the other hand, the General Insurance Council (GIC) is working closely with the IA on six working groups projects covering Catastrophe Risk – Systemic Man-made (Liability) / Catastrophe Risk - Non-systemic Man-made (Property & Engineering) / Credit Insurers / Reinsurers / SME GI insurers / Branches of insurers incorporated overseas. This is to facilitate more in-depth analysis of and focused discussion on these technical subjects with input from experts in the related fields within and outside the industry.
Insurance Fraud Prevention Claims Database (IFPCD)
Participating insurers and the Project Team have been working assiduously on the data transfer of the Motor line of business (LoB), of which the relevant fraud analytics are expected to be available in Q4 2019. Medical LoB is set to be ready in early 2020 based on the current progress and we are planning to roll out other LoBs such as Personal Accident, Travel and Employees’ Compensation in due course.
Our fraud detection capability will be substantially enhanced with the available analytics. So we have organized a briefing to facilitate Members’ reporting of fraud cases. In addition to the sharing of firsthand experience by seasoned claims handlers in dealing with fraudsters, we have also invited speakers from the Commercial Crime Bureau (CCB) to enlighten us on the proper way of reporting such cases to the Police Force (Circular Ref:Mv066/19).
ECI Standardized Practice - Report of Employees’ Earnings (ECI SP)
On4 June 2019, we held a second townhall in conjunction with IA and intermediary bodies six months after the official implementation of the ECI SP. The event was well attended with about 250 underwriters and intermediaries participating and the sharing was fruitful and constructive.
There remain some teething problems but the market generally has adapted well in embracing the need to provide good practice of accurate and full disclosure of risks. This is a work in progress. We are grateful for IA’s support and we appreciate the collaborative efforts of CIB and PIBA.
