April 2012 Issue No. 189
New Governing Committee
The Annual General Meeting held today approved the formation of a new Governing Committee for 2012/2013 as follows:
Chairman
Deputy Chairman
Members
Ms Agnes Choi
Mr Thomas Lee
Mr David Alexander Mr Alex Chu Mr Mike Lee Mr William Ng Mr Jimmy Poon Mr Roger Steel Mr Harry Wong Mr Allan Yu
HKFI’s Proposals to the Chief Executive-elect
With the assistance of the Honourable K P Chan, the HKFI has submitted some proposals to the Chief Executive-elect concerning the long term development of the insurance industry. On regulation, we support strengthening the protection of consumers. But any proposed measures must serve a specific purpose and be introduced in an orderly and co-ordinated manner. The industry should be properly consulted beforehand and given sufficient time to digest and implement such measures. The effectiveness of the new policies should be reviewed periodically and modified and refined where appropriate. We hope the Government will take the above into consideration in drafting the relevant legislation for establishing the Independent Insurance Authority (IA). More importantly, there must be representatives from the insurance industry on the board of directors and the advisory committee of the future independent IA to ensure that professional advice from the industry is well received. On the other hand, we highlighted the capacity of this city to develop itself into a regional hub of insurance, captive insurance and reinsurance while reinvigorating its status as a world class maritime centre. We also presented our wish-list on developing more business opportunities for insurers under CEPA and participating in the development of the Qianhai area.
Policyholders’ Protection Fund (PPF)
We have sought legal advice on the two proposals of major concern – the continuity of coverage for non-life policies until expiry and the provision of cover to SME – and submitted our latest position to the Government last week. We reaffirmed our wholehearted support to the Government’s initiative in promulgating a PPF for the protection of the people of Hong Kong. However, we are particularly concerned about the provision for continuity cover and the enormous risk and exposure that creates to insurers and for which they cannot reserve nor obtain reinsurance. On the provision of cover to SME, we are of the view that the Fund should be limited to meet claims from individuals losses and certain SME’s losses (in a limited class of insurance business). It should not seek to cover losses arising from classes of business carrying very high exposure in both risk and amount.
US Foreign Account Tax Compliance Act (FATCA)
On 17 April 2012, the LIC organized a briefing for around 100 representatives of Life Insurance Members where experts from three major accounting firms spoke on the subject of FATCA from the insurance perspective. Together with the Hong Kong Investment Funds Association, Hong Kong Trustees’ Association, Institute of Financial Planners of Hong Kong, the LIC is now preparing a joint industry submission to the United States Inland Bureau. It will incorporate major concerns raised by the industries with respect to some key compliance issues.