Monthly Brief 2022/03 EN

Mar 2022

Issue No.298

2022/2023 Election of Councils

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he General Insurance Council (GIC) and Life Insurance Council (LIC) are conducting the election for the next term. Your vote will decide who are going to represent you on matters of concerns and chart the way forward for the Councils and the HKFI. You are sincerely urged to cast your vote at our Honorary Auditor KPMG by 13 April (Circular Ref: Mv031/22 & Mv032/22). The elected councillors will assume office when the new term starts on 29 April after the AGM is held.

Survey on Brain Drain and Ease of Travel Restrictions

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e are pleased to note the recent Government’s announcement on easing inbound travel restrictions by resuming flights from international destinations and shortening the 14-day quarantine requirement for returning Hong Kong residents to 7-day from 1 April onwards.

In February, the HKFI conducted a survey on brain drain. The results pointed to the significant impact the stringent quarantine and travel restrictions have on our industry and Hong Kong’s status as an international insurance hub. Riding on the findings, we made several recommendations including relaxation of the quarantine requirements, resumption of flights and requesting for forward-looking guidance / clarity, some of which are in line with the changes to the pandemic control measures.

As the industry representative, the HKFI will continue communicating closely with all industry stakeholders and convey their views and concerns to the Administration as appropriate.

2021 Market Statistics and Claims Payout

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n 11 March, the Insurance Authority (IA) released the 2021 provisional statistics for the insurance market in Hong Kong. The figures revealed that the total amount of payment made to life insurance policyholders in terms of claims and benefits was $307.1 billion recording a year-onyear increase of over 25%, while the total gross claims payment for general insurance business was $31.4 billion.

The sheer amount of payout and its sizeable increase for life insurance policyholders highlight the important function of insurance during the trying times. Insurance is the backbone supporting all forms of socioeconomic activities and giving the insured peace of mind. Albeit that general insurers are experiencing a substantial drop in the underwriting profit, our industry still stand by our customers and the insuring public.

Green Insurance

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urrently, the Task Force on Green Insurance under HKFI has decided to engage a professional consultant to propose an industry charter, a reporting framework for our market and a model for the aggregation of climate-related data or cross-industry climate risk collaboration. The tendering exercise is underway and the research / study is expected to kick-start in the next quarter.

Apart from the above, in view that an increasing number of insurers have been implementing green and ESG initiatives or launching innovate products with green elements, we have published an “Insurers’ Green Story” series at the HKFI’s LinkedIn and Facebook channels. Seven insurers have already shared their efforts and innovation with stakeholders and the general public via our social media platforms. Member Companies are welcome to send us their green and ESG stories. For submission or enquiries, please contact the Secretariat at committee@hkfi.org.hk.

Further Facilitative Measures and Extension of VO platform

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n 4 March, the IA released a circular on its further facilitative measures under the COVID-19 pandemic. We issued a media statement and welcomed the IA accepting the recommendations of the LIC and modifying the Temporary Facilitative Measures (TFM) and Virtual Onboarding (VO). This is another crucial step taken by the IA and HKFI collectively to help our industry, in particular frontline practitioners, through the taxing and uncertain time amidst the fifth wave of pandemic.

The HKFI has collaborated with the IA in rolling out various facilitative measures since 2020. In September 2020, we launched the HKFI VO platform to cater for the needs, affordability and suitability of members of different size and distribution channels. Member Insurers are encouraged to leverage the pre-vetted platform to enjoy the streamlined approval process, in order to enable timely offering of protection / products to customers.

Going forward, we will continue working closely with our regulator and intermediary bodies to finetune the TFM and VO and find ways to help ensure the public have alternative avenue to obtain insurance advice and protection.

Standardization of Diagnosis Code

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n 2021, the Medical Insurance Association (MedIA) formed a working group on Diagnosis Code Standardization to kick-start a new initiative on developing a standardized set of diagnosis codes which is expected to be used between insurers and hospitals.

After rounds of member surveys and discussions with the Voluntary Health Insurance Scheme Office, we have agreed to adopt the ICD-10WHO version with one decimal place as the industry standard starting from mid-2023.

Member Companies are also encouraged to let us know if they have difficulty implementing the code. For details, please refer to our circular (Circular Ref.: ME604).

Consultancy Study for Common Information Portal for Individual Indemnity Hospital Insurance Claims

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o facilitate effective communication amongst insurers, healthcare providers and insured persons, the Food and Health Bureau (FHB) is exploring the feasibility and implementation details of setting up a common information portal for individual indemnity hospital insurance products.

The HKFI is supportive of leveraging technology to streamline procedures, reduce costs and improve customer journey. We thus support the above concept in principle. Our MedIA has met the consultant appointed by the FHB on 16 March and shared with them the industry’s opinions, concerns and suggestions.

Virtual Visit to Happy Valley Underground Stormwater Storage Tank

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n 1 March, with the assistance of the Drainage Services Department (DSD), the Fire Insurance Association organized a virtual visit to Happy Valley Underground Stormwater Storage Tank. Representatives from 23 Member Companies participated in this virtual visit and found it interesting and informative. Thanks to the the kind arrangement by the DSD, participants now have a better idea on technical knowledge such as flooding prevention and sewerage.

Key Observations from the First ORSA Reports

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he IA has released its observations of key areas of the ORSA report at the end of March. In order to help Members interpret the review results for better planning of the ORSA report in the future, the HKFI is going to organize a virtual training session on 14 April. For details, please refer to our circular (Circular Ref: Mv030/22).

Key Person in Control Function for Intermediary Management Training

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he HKFI has launched an industry mentorship program in 2021 to ensure the wealth of knowledge of our insurance veterans can be retained in our industry and their business wisdom and profound experience can be passed down to the younger generation. The programme also aims at nurturing the talents for the sustainable development of our industry.

The 2022 cohort is now open for nomination.

Members are welcome to nominate eligible staff members to join this programme as the mentees or recommend industry veterans retired from insurance companies to be the mentors. For details and enrollment, please refer to the circular (Circular Ref.: Mv024/22) or visit the website at https://www.hkfi.org.hk/ etdprogramme.

e have invited IA’s Head of Market Conduct Division Mr Peter Gregoire to speak at the above C-suite training session to be held on 5 & 6 May to raise awareness of the importance of the Intermediary Management (“IM”) function of an insurer.

The training will help participants to further examine the areas where key persons in IM function of an Authorized Insurer should implement controls and processes, how they can formulate controls and processes, and indicate the type of controls and processes the IA would expect to see across different areas. 4 CPD hours will be offered to the attendants who have completed the full course. Stay tuned for the enrollment details!

Cancellation of Annual Reception 2022

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wing to the latest social distancing measures under COVID-19, the Annual Reception 2022 originally scheduled for April will be canceled. We look forward to catching up with you in other corporate events when the pandemic situation improves.

Membership News Change of Authorized Representative ● General Insurance Member: Allied World Assurance Company Limited – Mr Andy Mang Fei Tsui ● General Insurance Member: Tugu Insurance Company Limited – Mr William Ng HKFI Membership As at 31 Mar 2022, the HKFI has 84 General Insurance Members and 54 Life Insurance Members.