May 2018
Issue No.256
Message from HKFI Chairman
I am honoured to be elected as HKFI Chairman for the 2018/2019 term. As you know, the Federation will celebrate its 30th anniversary in August 2018. Thanks to your support and guidance, we will continue to act as the progressive voice of the industry and collaborate with all stakeholders including the Insurance Authority (IA) to protect P L Chan consumers and help grow the market. HKFI Chairman
New Member
A warm welcome to HKMC Annuity Limited (HKMCA) for joining HKFI as a Life Insurance Member.
IA’s Direct Licensing Regime
The IA has responded favourably to most of our recommendations on the Fitness and Properness Criteria for intermediaries in the new regime: • • • • •
Grandfather ing all existing inter mediar ies registered with the 3 SROs Accepting both HKDSE and HKCEE as entry requirement for new intermediaries Increasing CPD hours to 15 per assessment year Including ethics management as a compulsory subject for CPD courses Recognizing e-learning activities for CPD programme
Meanwhile, we are collecting views from insurers on conduct requirements for intermediaries, with special focus on the best interest of policyholders. Consolidated views will be provided to the IA for consideration when drafting the relevant code.
Revised Code of Practice for the Administration of Insurance Agents
To facilitate the implementation of Life Annuity Scheme (LAS), we have, after due consultation with all Members, revised the Code of Practice for the Administration of Insurance Agents to allow a bank to be registered with HKMCA to sell LAS on top of the existing combination of principals as stipulated in the Code. The banks concerned, however, must seek consent from their existing insurance companies prior to registering with HKMCA (Circular Ref: Mv042/18).
We met the Food and Health Bureau (FHB) on 10 May 2018 to further discuss the proposed tax deduction arrangement with specific reference to the classification of “Enhanced Benefits” and “Other Benefits” of the VHIS-compliant products. We also discussed highend products and their eligibility for tax deduction under the VHIS framework. Other operational details under Flexi Plans are also being reviewed to ensure they are practical and realistic. According to FHB, the product certification will start after the passing of the relevant Inland Revenue legislation. The FHB will facilitate the registration of insurers as VHIS service providers and their VHIScompliant products in a swift manner. We will conduct a townhall meeting for all Members when more details are confirmed.
Tax Concession for Deferred Annuity
The LIC has set up a special group tasked to work with Financial Services and the Treasury Bureau (FSTB), IA and the Hon KP Chan to come up with a viable framework for implementing this policy initiative of the Government. On the key issues like Internal Rate of Return (IRR) for guaranteed return and best estimate IRR for non-guaranteed return, minimum premium payment period, etc, we put forward practical suggestions which were received by the Administration. As a next step, the LIC will liaise with IA to iron out the related operational details. Tax concession for premiums paid for eligible deferred annuities / MPF voluntary contributions is expected to be implemented in the financial year of 2019-20.