June 2011 Issue No. 180
Meeting the Media
On 15 June 2011, HKFI Deputy Chairman Ms Agnes Choi, General Insurance Council (GIC) Chairman Mr Jimmy Poon, Life Insurance Council Chairman Mr Thomas Lee and I met with a group of journalists from the local printed media. We briefed them on the work and challenges of the HKFI and the latest market situation. The subsequent media coverage was generally very positive. We will continue to communicate with the mass media through various channels.
Proposed Independence of the Insurance Authority (IA)
On 24 June 2011, the Financial Services and the Treasury Bureau announced the consultation conclusions and the proposed way forward. We issued a press statement on the same day to reaffirm our support in principle of the proposed independence of the IA which would help strengthen the present regulatory regime and be good for the healthy development of the insurance industry in the long term. In addition, we reiterated the importance for the Government to conduct a second round consultation with the industry on details of the proposed changes. Specifically, we are concerned about the way in which the industry can participate in the future Governing Board of the proposed independent IA. Also, it is necessary to set out clearly how the banking channels are to be regulated to ensure supervisory consistency and a level playing field for all insurance intermediaries. The relevant task force headed by Mr Allan Yu will look into all this and further consult Member Companies accordingly.
Disclosure of Intermediaries’ Remuneration
A task force headed by Ms Agnes Choi has reviewed this subject in the context of the Prevention of Bribery Ordinance (PBO) as it applies to commission disclosure by insurance brokers. Based on legal advice, we have drafted a template of declaration for Members’ reference. The draft template is being reviewed by the IA. And we aim to issue it to Member Companies and brokers’ bodies together with the relevant legal advice by early July.
General Insurance Travel Industry Council of Hong Kong’s New Rules on Refunds for Trip Cancellations We had a meeting with the Travel Industry Council of Hong Kong (TIC) on 14 June 2011 to express our serious concerns about their new rules regarding refunds for trip cancellations (Directives No 177 and 203). We drew to their attention the obvious gap between the perils leading to trip cancellations as classified by the TIC and what insurance can do to provide suitable coverage. I am pleased to report that we reached a common understanding with the TIC that: • not all of the situations referred to under the new rules could be covered by insurance; • travel operators would continue, where necessary, to try and seek recovery of funds from transport service providers, i.e., airlines, cruise liners and train companies, on behalf of consumers in line with the existing practice; and • in the longer term, the TIC will step up its dialogue with service providers to establish a proper and transparent refund mechanism to protect the interests of consumers.