The Hong Kong Government is to establish a working group to facilitate the transition from the present self-regulatory insurance regime to the new regime administered by an Independent Insurance Authority (IIA).
This was confirmed by the Permanent Secretary for Financial Services and the Treasury (Financial Services), Au King-chi, during remarks at a reception hosted by the Hong Kong Confederation of Insurance Brokers (CIB) on October 3.
She said that the Financial Services and the Treasury Bureau would convene with the working group and invite members from the Hong Kong Federation of Insurers (HKFI) and the three self-regulatory organizations – the CIB, the Insurance Agents Registration Board (IARB) and the Professional Insurance Brokers Association (PIBA) – as well as insurance intermediaries.
The working group aims to hold its first meeting this month. "We shall continue to engage different stakeholders, in particular the insurers, insurance agents and brokers, as well as policyholders, in the process," Miss Au said. "We believe the working group will provide a useful platform for key stakeholders to build trust and consensus in preparing for the migration of the current self-regulatory regime for insurance intermediaries to the new regime."
The Government aims to establish the IIA in 2015, and is finalizing the enabling legislation for introduction into the Legislative Council within the 2013-14 legislative year.
It is hoped that the establishment of an IIA will provide better protection for insurance policyholders and enhance the regulation of insurance companies and intermediaries, so as to facilitate the stable development of the insurance industry in Hong Kong and help to reinforce its position as an international financial center.
The legislative amendments will cover the functions and governance structure of the IIA, a licensing regime for insurance intermediaries, the regulatory powers of the IIA, regulatory arrangements for banks' insurance intermediary activities, the appellate mechanism and checks and balances and a funding mechanism.
The transitional matters to be discussed by the working group will therefore include the operational arrangements for deeming of pre-existing insurance intermediaries validly registered with the IARB, the CIB and the PIBA as licensees under the IIA for three years from the commencement of the new statutory licensing regime.
The group will also discuss a stocktaking of the in-force codes and guidelines on conduct of insurance intermediaries published by the HKFI, the CIB and the PIBA for future reference by the IIA; and the dissemination of information to industry practitioners and the public on important matters related to the transition to the statutory licensing regime.A comprehensive report in our Intelligence Report series which studies the 20 main offshore jurisdictions which offer captive insurance regimes is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report11.asp
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