July 2013 Issue No. 203 Independence of Insurance Authority (IIA)
In our submission to the Panel of Financial Affairs of the Legislative Council (Legco) on 5 July 2013, we highlighted the outstanding issues to be resolved: representation on the IIA Board and the Industry Advisory Committees; role of the CEO; conduct requirements; pecuniary penalties and appellate mechanism. As the Financial Services and the Treasury Bureau (FSTB) is planning to present the bill to Legco by Nov 2013, we wrote to Prof K C Chan, Secretary of Financial Services and the Treasury, to reiterate our readiness to work with the Government to resolve these issues and help gather the industry's support before the legislation is introduced. Regarding industry's representation on the future IIA Board, we can draw reference to the set-up of the proposed Travel Industry Authority Board. The Government has recommended that 8 out of 22, i.e. 36% of the board will come from the trade. And of these eight trade members, 3 will be nominated by the Travel Industry Council, the current self-regulatory body for travel agents. Seen in this light, there is a valid and solid case for the Government to increase our industry's representation on the future IIA Board to no less than 25% as suggested by HKFI.
Policyholders Protection Fund (PPF) Equally important is the proposed establishment of a PPF. The briefing held on 11 July 2013 attracted about 90 representatives from 48 Member Companies. After understanding the potential risks associated with off-shore risks, cap on levies, SMEs and the provision of continuity of cover, participants raised a series of pertinent questions. The proposed PPF is intended to be launched by 2015. As such, members are urged to seize this window of opportunity to voice out their views and concerns to the FSTB and the IA accordingly. Meanwhile, we will also provide another written submission to the Administration.
Health Protection Scheme (HPS) At the Legco's subcommittee meeting held on 8 July 2013, the Food and Health Bureau (FHB) presented some new ideas on the proposed HPS. Unfortunately, we were not given the opportunity to review or validate the figures provided by the FHB before they were submitted to the Legco. In our last letter to the FHB, we stated clearly that the fundamental operating principles of the HPS must be properly addressed before dealing with the technicalities.
The Evolution of Qianhai: How Can Hong Kong Benefit I addressed the above seminar organized by SCMP on 19 July 2013. Speaking as the Chairman of HKFI, I shared with the audience the advantages and potential of developing a captive insurance centre in Qianhai and how Hong Kong insurers can contribute to and benefit from this development.
HKFI Annual Report 2012/2013 The latest HKFI Annual Report was published in mid-July. Illustrated with a collection of pictures, it provides an interesting and comprehensive overview of the work accomplished by the HKFI in the past 12 months. An e-version is available online at: www.hkfi.org.hk/annualreport/.