Monthly Brief 2016/06 EN

June 2016

Issue No.235

HKFI New Member

Levy and Fees to be Collected by the IIA

Limited for joining HKFI as our Life Insurance Member!

In the light of the concerns raised by Members, the

Our warmest welcome to Generali Life (Hong Kong)

Mr Allan Yu's Resignation and Changes to the Governing Committee

Following Mr Allan Yu’s resignation from the Governing Committee and various Task Forces, you will wish to note the following changes: ● Mr Harry Wong - Governing Committee Member representing the General Insurance Council and Chairman of Task Force on Prevention of Insurance Fraud & Claims Database ● Mr Jimmy Poon – Chairman of Task Force on Policyholders’ Protection Fund ● Mr Ronnie Ng – Chairman of Task Force on Independent Insurance Authority (IIA) I would like to record a sincere vote of thanks to Mr Yu for his tremendous contribution to the HKFI and the industry in the past decade. We wish him all the best!

Hong Kong Insurance Awards 2016

The Hong Kong Insurance Awards 2016 is inviting

application! The response from member companies and industry practitioners has been encouraging.

Entry submission deadline is 31 July 2016. Visit our official website now at http://www.hkfi.org.hk/hkia/ and showcase your outstanding accomplishments and successful stories for the period between 1 July 2015 and 30 June 2016!

Meanwhile, you can book your table at the Awards Presentation Ceremony cum Gala Dinner to be held at InterContinental Hong Kong on 27 October 2016.

Reservations will be made on a first come, first served basis. Tailor-made sponsorship packages are also available for interested member companies. Contact us at 3698 8702 or visit http://www.hkfi.org.hk/hkia/ for details.

Financial Services and the Treasury Bureau (FSTB) has fine-tuned the proposed proxy approach. Other operational and implementation issues have also been addressed. We understand that the proposed levy collection mechanism will kick in as from 1 April 2017.

We will make sure the industry is properly consulted on the draft subsidiary legislation.

Establishment of an Insurance Claims Database for the Prevention of Fraud

This project is making good progress. Based on months

of extensive research on overseas practices, meeting various groups of stakeholders and claims experts, and several rounds of in-depth discussion by the Provisional Board, our consultants have come up with a detailed proposal on the business and operating model of the database. We have also developed a robust legal case to address related data privacy issues.

The Governing Committee has endorsed the proposal in principle and supported the idea of organising a town hall meeting for all Member Companies to explain the project details and answer questions before proceeding further.

Consultation Document on Retirement Protection Forging Ahead

The HKFI suppor ts Government’s holistic review

of the entire retirement protection system for Hong Kong people. Specifically, we endorse the principle of “ those with f inancial needs” as resources in Hong Kong are limited and should be used to help those who are in need, particularly the non-working population without MPF and other pension coverage.

It is our consolidated view that the current MPF contributions at 5% + 5% are way too low as scheme members would end up receiving a limited level of accrued benefits upon retirement. Therefore, we suggest that consideration be given to the feasibility of raising the MPF contribution rate upon full implementation of the Default Investment Strategy.

Pilot Programme to Enhance Talent Training for the Insurance Sector

The Financial Secretary has allocated a funding of $50M to

launch a three-year programme to help the industry to address its longstanding problem of talent shortage and help fill the skills gaps.

Under the captioned programme, resources will be dedicated to areas on public education, work-and-learn programme, internship programme and professional training. As one of the Self-regulatory Organisations, the HKFI has been invited to provide input and support to ensure the funding is well used and achieves the best possible outcomes.

Compulsory Third Party Liability Insurance for Local Vessels

I am pleased to announce that starting the July 2016 cohort, newly recruited student-trainees joining the YIE Programme will receive a salary subsidy from the Government under the Pilot Programme to Enhance Talent Training for the Insurance Sector. On top of the $2,500 monthly allowance for up to 16 months, the student-trainees with the best performance upon graduation will be eligible to join a 2-week intensive immersion programme overseas.

We hope these new features will help attract more young talents to the programme as a first step in joining the industry.

On this, we look forward to more support from Member Companies. If you are interested in signing up for the YIE Programme as employer, please contact the HKFI Secretariat at 2861 9333 (Circular Ref: Mv030_16).

Liability Insurance Cover for Roadside Cargo Compartments

In the wake of the vessel collision incident of Lamma Island, it Thanks to the Honourable K P Chan and Chi-ming Yick, the was suggested to increase the minimum liability level of the Compulsory Marine Third Party Risks Insurance. On this, the Marine Insurance Association (MIA) offered professional assistance and support to the Marine Department in its engagement with vessels operators on increasing the mandatory limits of vessels to the range of HK$5 million and HK$10 million.

After several rounds of discussions, the proposal put forward by the MIA was accepted by the Legislative Council and it will come into effect on 1 September 2016 (Circular Ref: M3081).

Hong Kong Waste Disposal Industry Association (HKWDIA) approached HKFI ear ly on to ref lec t their member s’ difficulties in purchasing liability insurance cover for roadside cargo compartments. It is noted that the number of these compartments has reached 3,600 territory-wide. We met the HKWDIA representatives to listen to their concerns and recommended ways of improvement. They appreciated our prompt response and useful advice.

Visitors

We received two groups of visitors during the month. In midJune, the Chief Executive of the Singapore College of Insurance visited the HKFI and explored ways of upgrading the industry training for both markets. On 30 June 2016, three senior officials from the Nansha Free Trade Zone (FTZ) paid us a visit. Among other things, we ex p l o r e d b u s i n e s s opportunities for Hong Kong insurers in the FTZ.

Membership News

New Membership Generali Life (Hong Kong) Limited (Life Member) Change of Authorised Representative ● Bupa (Asia) Limited (General Member) - Mr Anthony Forster ● Zurich Insurance Company Ltd (General Member) - Mr Eric Hui HKFI Membership As at 4 July 2016, the HKFI has 89 General Insurance Members and 49 Life Insurance Members.

Ronnie Ng HKFI Chairman