Feb 2018 Issue No.253
Direct Licensing Regime of the Insurance Authority (IA)
We submitted a comprehensive list of probable scenarios of regulated activities conducted by salaried staff to the IA in 2016 and suggested for their consideration in September 2017 a draft back office vs front office regulatory framework.
Right before the Chinese New Year, the IA produced a set of FAQs with illustrative examples to help clarify the legislative intent of the licensing regime and try to address concerns raised by Member Insurers. The GIC and LIC are reviewing the document and will share our initial observations with the IA. Upon receipt of further input from the IA, we will conduct a full Members’ consultation.
Insurance Fraud Prevention Claims Database (DB)
With the Steering Committee officially in place to oversee the development and governance of the DB, the Project
Team is now preparing for the launch of the DB in full swing. Currently, a set of agreement, Code of Practice and operation manual are being prepared for Members’ onboarding. We will conduct a Members’ briefing in due course to bring you up to date on the way forward. Meanwhile, if you have questions about the DB, please contact the Project Team at 2238 7714 or 2531 1831. At its last meeting held on 27 February 2018, the GC resolved to set up a Provisional Executive Committee (PEC) under the chairmanship of Mr Harry Wong to maintain the project momentum and ensure a smooth launching of the DB in Q3 2018.
Tax Incentives for Long Term Products
In his budget speech for 2018/19, the Financial Secretary (FS) introduced new tax incentives for annuity products and MPF voluntary contribution.
We are pleased to note that the FS has taken into account the recommendations we have made in September 2017 on tax relief. We welcome the introduction of such tax incentives and believe that they will help raise public awareness of the role and function of annuity and attract higher take up rate. The tax allowance for MPF voluntary contribution will incentivize our working population to top up their MPF account for retirement purposes and make good use of this occupational retirement savings vehicle. Going forward, we will set up a special committee to provide all the necessary professional input and expert advice to help the IA and Financial Services and the Treasury Bureau to work out an appropriate tax incentive scheme for the good of the HK community.
The FS also proposed to provide tax incentive for VHIS products. We welcome this policy decision by the Government and hope that it will help encourage more Hong Kong people particularly wage earners in their 20’s and 30’s to take out VHIS early for life time protection against unexpected medical bills.
To prepare for the launch of VHIS on 1 April 2019, we have recently met the Food and Health Bureau (FHB) to discuss the outstanding issues, e.g. the respective regulatory roles of FHB and IA, implementation timeline, migration arrangement, communication plan, public education, etc. On regulation we understand that FHB will liaise with IA to work out a proper framework for handling consumers’ complaints. Going forward, we will invite FHB officials to come and brief Members on the latest VHIS framework, the standard Terms and Conditions and the related Code of Practice. On the last item we will invite IA officials to join the briefing session to ensure everyone is on the same page.