According to reports in the regional media, a consultation with the Hong Kong insurance sector over the possibility of spinning off the Insurance Authority from the government has revealed that there is strong opposition to the plan due to fears of increased costs for insurance firms and their policy holders as a result of the move.
Speaking to lawmakers on Thursday, Insurance Commissioner, Benjamin Tang Kwok-bun revealed that insurance firms had reservations about the proposal to make their regulator independent from the government, because they envisage paying more of the Authority's HK$100 million operating costs.
Currently, the government pays around 60% of this sum, whilst the remaining 40% is paid by licence fees from insurance firms in the territory.
According to the South China Morning Post, some legislators have suggested that they will support the plan if the government can produce detailed projections of future operating costs for the independent regulator.
However, Permanent Secretary for Financial Services and the Treasury, Tony Miller explained last week that this was not yet possible, as the government has not decided on a model for the new Insurance Authority.
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