A three-month public consultation on key legislative amendments to the Insurance Companies Ordinance for the establishment of an independent Insurance Authority launched today. The deadline is January 26, 2013.
The amendments in the consultation document cover the the independent Insurance Authority's functions, governance structure and regulatory powers; a licensing regime for insurance intermediaries; regulatory arrangements for banks' insurance intermediary activities; the appellate mechanism and checks and balances; funding mechanisms; and transitional arrangements for insurance intermediaries.
The Government proposes to establish the Insurance Authority as a body corporate, consisting predominately of non-executive directors from a cross-section of the community including members with knowledge of the insurance industry and other professionals.
On insurance intermediaries licensing, the Government proposes legislative amendments to define insurance intermediary activities as "regulated activities". On conduct regulation, the Government proposes to lay down broad principles of conduct requirements of insurance intermediaries, such as acting honestly and fairly, exercising a reasonable level of care and diligence, and making necessary information disclosure.
The independent authority will be vested with powers of inspection, investigation and imposing disciplinary sanctions to regulate authorised insurers and insurance intermediaries. The Government also proposes to empower the independent authority to delegate specified functions to the Hong Kong Monetary Authority for effective regulation of banks' insurance intermediary activities.
The Government proposes to establish an Insurance Appeal Tribunal to consider appeals against the independent authority's regulatory decisions, including disciplinary decision. The authority should be self-financed with income streams from licence fees, service charges to insurers and licensees, and a levy of 0.1% on premiums of all insurance policies.
The consultation document has been uploaded to the bureau’s
website. Views should be sent by mail to Special Duties Division, Financial Services Branch, Financial Services & the Treasury Bureau, 24/F, Central Government Offices, 2 Tim Mei Avenue, Tamar, by fax to 2527 0292 or by
email.
