Jun 2017
Issue No.246
New Insurance Authority (IA)
On 26 June 2017, the Insurance Authority officially replaced the Office of the Commissioner of Insurance as our industry’s regulator.
Last week we hosted a farewell lunch to thank the former Commissioner of Insurance Mr John Leung and his team of senior management for their support and contributions to the industry over the years. We look forward to closer collaboration with the new IA to safeguard the interests of policyholders and promote the sustainable growth of our insurance market. As part of the migration to the new regulatory regime, the IA has recently issued two sets of guidelines, namely Guideline on "Fit & Proper" Criteria (GL4) & Guideline on Exercising Power to Impose Pecuniary Penalty in respect of Authorized Insurers (GL18). When finalizing the two GLs, the IA has taken into account HKFI’s comments. In particular, it provided more clarity on the transitional arrangements in respect of Key Persons in Control Functions under GL4. On the proposed collection of policy levy for the IA, we have received considerable comments from Members on the second draft note. The relevant comments are being reviewed by the IA and Financial Services and the Treasury Bureau. Given the importance and complexity of this issue, we have requested and IA CEO Mr John Leung has kindly agreed to provide a help-desk, a set of FAQs and other relevant information at their website to help address questions from insurers. The IA has also undertaken to organize a briefing for our Members in the near future.
Medical Claims Statistics
The Task Force on Health Care Reform, the Medical
Insurance Association (MedIA) and individual insurers have been busy meeting the Food and Health Bureau (FHB) and its appointed consultants on VHIS consultancy studies.
To bring Members up to date on the latest version of the VHIS framework and the objectives and deliverables of the consultancy studies, we invited the FHB and its consultants to conduct a briefing on 20 June 2017, which attracted a full house of 120 representatives from 45 Member Companies. Some of the key issues raised related to the product approval process, options of loading vs exclusion, tax incentive for policyholders, etc. We will maintain regular dialogue with the FHB and its consultants to help formulate a proper and commercially viable regulatory framework for VHIS.
At a media conference held
on 6 June 2017, the MedIA released the 2015 set of medical claims statistics and provided an update on some significant market trends. Among other things, two key messages were highlighted for public information: ● Albeit the relatively stable average reimbursement ratio, policyholders should regularly review their benefit coverage to ensure it is sufficient to meet the rising medical expenses (medical cost inflation at about 6% to 13%). ● Medical expenses may triple or quadruple for colonoscopy and gastroscopy per formed in the General Ward instead of an outpatient setting. Taking colonoscopy done in a clinic as an example, the insured will get from the insurer $91 for every $100 spent (i.e. patient paying the remaining balance of $9) while for the same procedure conducted in a hospital, the insured needs to pay $16 out-of-pocket.