The consultation conclusions and detailed plans for the proposed independent Insurance Authority were announced today.
Secretary for Financial Services & the Treasury KC Chan said establishing the authority will enhance the regulation of insurance companies and intermediaries, and meet international practice for financial regulators to be independent, both operationally and financially, of the Government and the industry.
The authority will be given powers to initiate investigations, search and seize materials upon the issue of a warrant, prosecute offences summarily and impose a range of regulatory sanctions in cases of misconduct.
It will also hold a direct regulatory role over the conduct of insurance intermediaries through introducing a licensing regime.
To facilitate a smooth transition and to minimise the impact on pre-existing insurance intermediaries, the Government proposes that those who are validly registered with the self-regulated organisations should be considered as licensed with the authority for three years upon its establishment, so they can conduct business while applying for licences from the authority.
The Government proposes the authority be able to delegate to the Monetary Authority specified powers to perform certain frontline regulatory functions.
The Monetary Authority will be accountable to the Insurance Authority in exercising such delegated powers. Disciplinary powers will be vested with the authority and the Monetary Authority will participate actively in the disciplinary process to ensure consistency.
An independent tribunal is also proposed to handle appeals by insurers and insurance intermediaries against regulatory decisions. The tribunal will operate on a full-time basis and be chaired by a person eligible for appointment as a High Court judge.
It will also include a number of market practitioners and industry experts.
At least two industry advisory committees are proposed to be formed to advise and make recommendations to the Insurance Authority’s Governing Board.
Click
here for the consultation conclusions and detailed proposals.
The Legislative Council’s Panel on Financial Affairs will be briefed on July 4. The draft key legislative provisions are expected to be available in early 2012 for further engagement with stakeholders.
