The Office of the Commissioner of Insurance is committed to adopting international standards and enhancing transparency to ensure Hong Kong's insurance regulatory regime keeps pace with the dynamic developments of the industry, commissioner Richard Yuen says.

Reviewing last year's work in the OCI Annual Report 2004 released today, Mr Yuen said the office has been working closely with the industry on initiatives to enhance policyholder protection.

"We have joined hands with the self-regulatory organisations of the industry to strengthen supervision of insurance intermediaries, including the launch of a new version of the Customer Protection Declaration Form to better inform life policyholders of the implications relating to policy replacement," Mr Yuen said.

Pointing out that investment-linked products are becoming more popular, he reminded insurers to ensure policyholders understand the predominantly 'investment' nature of these products.

"Driven by some insurers' vigorous marketing activities and the low interest rate environment, investment-linked products are fast-growing in popularity. Such products give policyholders an additional choice but many of them provide relatively low protection for mortality risk," he said.

More interaction

Last year saw the implementation of the Closer Economic Partnership Arrangement with the Mainland. In response to the increased interaction between the two insurance markets, the insurance authority signed a Memorandum of Understanding with the China Insurance Regulatory Commission in November to promote closer co-operation and sharing of supervisory experience.

"Accelerated pace of globalisation and convergence of financial services will continue to pose new challenges and opportunities to the insurance industry. We will keep track of the dynamic market developments and do our best to maintain an open, transparent and business-friendly environment," Mr Yuen said.