Completion of Historical Mission 23
September 2019 is a milestone for the insurance industry of Hong Kong. It marks the completion of HKFI’s self-regulatory organization (SRO) functions and also the beginning of the new insurance regulatory era under the Insurance Authority (IA).
We are extremely and forever grateful to the serving and past chairmen and members of Insurance Agents Registration Board (IARB) and the Appeals Tribunal. Their dedication and exemplary service has made our SRO regime most robust and effective. It has earned the trust and support from insurers, intermediary bodies and the insuring public and helped strengthen the position of Hong Kong as an insurance hub.
A celebratory drinks party will be held later this year to commemorate the glorious completion of our SRO regime, pay tribute to all those who have contributed to its success and mark the beginning of a new chapter of the HKFI.
Transition to the Direct Licensing Regime (DLR)
We have dedicated considerable time and resources to ensure a smooth and seamless transition, including conducting 40 consultations relating to DLR, organizing 11 townhalls on various topics, transfer of physical and electronic registration / compliance / appeals records to the IA, etc.
In addition to these important tasks, IARB’s Registration Team has also completed processing 24,000 new applications for registration received between May and August 2019, which is 42% higher than the normal rate. Albeit the complexity of the subject and the multiple tasks to be accomplished within a very stringent time line, we are pleased to say that through meticulous planning and close collaboration with the IA, our efforts have paid off with very satisfying results.
DLR on Long Term Business
Two Codes of Conduct and 10 sets of Guidelines (GLs) have been issued under the new DLR, among which, six on long term business were previously under the purview of the Life Insurance Council (LIC). We supported the IA in revamping these GLs since November 2018 and together we have completed 14 consultations in less than a year’s time.
To facilitate Life Insurance Members’ (LIMs) compliance, IA would be issuing Interpretation Notes for these GLs. LIC’s Special Committees (SC) (Circular Ref: Mv095/19) and respective Working Groups (WG) were tasked to provide input to the contents and assist in future modifications / fine-tuning of these Notes. Industry discussions were held throughout September and meetings with IA’s officers responsible for the respective GLs will take place in October. We will then conduct townhalls on these GLs to enhance LIMs’ understanding of the GLs. Please stay tuned.
The Financial Sector Assessment Program (FSAP) team of the International Monetary Fund (IMF) visited Hong Kong in mid-September 2019 for a comprehensive and in-depth analysis of Hong Kong’s financial sector. As one of the key stakeholders, HKFI was invited to discuss a number of issues pertinent to key risks and risk-based capital requirements of the insurance sector. We also expressed views on key impacts of IA’s establishment on insurance regulation and supervision, InsurTech developments, other regulatory initiatives including the development of group wide supervision and policyholder protection and resolution planning.
Insurance Fraud Prevention Claims Database (IFPCD)
While the Project Team is busy working on the first three lines of business (LoBs), namely, motor, medical and personal accident, the Executive Committee has decided to launch the fourth LoB – travel insurance – in the coming months due to the recent spike in alleged fraud cases relating to travel insurance. The onboarding timeline and annual fee will be announced very soon. If you are interested in joining the above mentioned LoBs, please contact the Project Team at 2861 9392.
HKFI representative elected as IUMI Vice President
International Union of Marine Insurance (IUMI) held its Annual Conference in Toronto in mid-September. Hong Kong, as IUMI Asia Hub, formed a delegation of six to join the conference and actively participated in various technical committees and forum.
We are pleased to announce that, Mr Timothy Lee, Deputy Chairman of the Marine Insurance Association, is elected the Vice President of IUMI for a term of four years. We will support Mr Lee’s work at the IUMI and step up our role as IUMI Asia Hub.
Risk-Based Capital Framework (RBC)
IAissued the template and technical specification for the Third Quantitative Impact Study (QIS 3) to all insurance companies for completion by end-November. In this conjunction, the General Insurance Council organized Members’ briefings for IA to explain the difference between QIS 2 and QIS 3, address the key outstanding concerns covered in our circular and provide some tips on template completion.
At the same time, some LIMs indicated their willingness to participate voluntarily in the additional scenario for QIS 3 on the latest market conditions as interest rate had dropped significantly in the course of 2019. The LIC is consulting LIMs and engaging the IA on this front.
Hong Kong Industry Market Research 2019
We commissioned Nielsen to conduct the industrywide market research for the third consecutive year and are, with the support of the Task Force of Customer Advocacy, developing the questionnaires.
Last year, we received enthusiastic support from Members and some of them subscribed to the detailed analysis pertinent to their companies. In view of the demand, we have come up with a pre-subscription model which embeds customized questions for individual companies in addition to the holistic market research. Deep dive reports at preferential rate will be available for Members’ subscription. A briefing will be held to explain the project scope and fee structure.
HKFI being appointed to the FECC
We meet VHIS Office regularly to review the implementation progress of VHIS. In the recent meeting, we discussed the arrangements for recertification of Certified Plans and standardization of medical underwriting questionnaire, which was initiated by the Medical Insurance Association (MedIA).
The Hong Kong Insurance Awards 2019
This year, over 120 quality entries were received from the industry competing for 17 categories. Thanks to the wise counsel of our honourable judges, the top three finalists for each category were shortlisted (https://www.hkfi.org.hk/hkia/2019finalists.html).
The finalists met the panel of judges on 18 and 19 September for the presentation session and the winners will be announced at the Prize Presentation Ceremony cum Gala Dinner to be held on 24 October at the InterContinental HK. Reserve your tables now at https://www.hkfi.org.hk/hkia/ book.html to join us in celebrating the remarkable achievements of our industry!
To support its Financial Literacy Strategy, the Investor and Financial Education Council (IFEC) has formed a new Financial Education Coordination Committee (FECC) and the HKFI has been appointed as one of the Members. We will continue contributing and supporting the public financial education for the well-being of our society at large.
Membership News
Change of Authorized Representative
● Hong Leong Insurance (Asia) Ltd. (General Member) – Mr Lai Tak Mo, Ken
● Munich Reinsurance Company Hong Kong Branch (General Member) – Mr Fang Yu
● AXA Corporate Solutions Assurance – Hong Kong Branch (General Member) – Mr Jamie Chambers
● Swiss Reinsurance Company Ltd. (General & Life Member) – Mr Victor Kuk
HKFI Memebership
As at 30 September 2019, the HKFI has 86 General Insurance Members and 51 Life Insurance Members.