October 2014 Issue No. 215
Independent Insurance Authority (IIA) The Legislative Council's Bills Committee reconvened after the summer break and met on 20 October 2014. It transpired that the Administration intended to regulate the paid staff of insurance companies who have direct interaction with customers or policyholders on sales or advisory matters relating to insurance policies. This may affect a wide spectrum of salaried staff performing functions such as customer service, telemarketing, sales & distribution, marketing, underwriting and claims. We conducted a quick survey among all Member Companies on the impact this might have on their business operations. 103 Members have responded which included a vast majority of direct insurers. Our concerns were duly reflected to the Financial Services and the Treasury Bureau (FSTB) and the Insurance Authority (IA) at a meeting held on 30 October 2014. We are pleased to note that the Administration had indicated willingness to explore with us practical ways to address the concerns raised. The Task Force on IIA will come up with some suggested solutions and consult our Members before discussing this further with the regulator. Risk-based Capital (RBC) Framework for Hong Kong The three members briefings on RBC were over-subscribed. All sessions were moved to bigger venues to accommodate more participants. Thanks to the detailed explanation by Ms Annie Choi, Commissioner of Insurance, Members now have a better grasp of the major changes being considered and the potential impact on industry players, big and small. The Task Force under the Governing Committee and the two Sub-groups set up by the General Insurance Council and the Life Insurance Council are now studying the issue in depth. We will keep you informed of developments.
Captive Insurance At the invitation of the FSTB, I represented the HKFI at the 6th China Overseas Investment Fair held last week at the Beijing Exhibition Centre. Riding on the theme of the forum "Hong Kong Financial Services Support Mainland Company Going Global" (香港金融服務助推中國企業走出去), we took the opportunity to understand more the needs of mainland’s enterprises on captive insurance and show them the benefits of establishing captive insurance in Hong Kong. Pilot Scheme on “Young Insurance Executive Development Program” In a survey conducted by the Task Force on Apprenticeship Programme, about 30 General and Life Insurance Members registered their interest in providing placement opportunities in various fields. They include underwriting, claims, policy/pensions administration, product development, actuarial support, sales/marketing and customer servicing. We are making progress together with the Vocational Training Council in developing a suitable curriculum for the pilot scheme. Also, we are actively exploring ways to promote this programme to try and attract more entrants by, for example, providing scholarships through the HKFI Educational Trust. In the meantime, the FSTB is putting together key recommendations on career navigation and training initiatives for the insurance sector. Details on Government’s support including financial subsidies should be available by the end of 2014.