Hong Kong - Independent insurance regulatory body a step closer
Source: Asia Insurance Review | Aug 2015
The Independent Insurance Authority (IIA) is moving closer to fruition, after the Bill establishing a fully independent and dedicated insurance regulator was passed in the legislature last month.
The IIA, once operational, will lead to dramatic changes in the way Hong Kong’s insurance market is regulated. The new body will bring under its supervision the insurance intermediaries in Hong Kong, whose oversight had until then been the preserve of three distinct self-regulatory bodies.
Under the current regime, insurers and reinsurers fall under the direct supervision of the OCI, while insurance agents and brokers are supervised by either one of the three self-regulatory organisations: the Insurance Agents Registration Board under the Hong Kong Federation of Insurers and in the case of brokers, the Hong Kong Confederation of Insurance Brokers and the Professional Insurance Brokers Association.
The IIA will also be granted greater supervision and inspection powers, on par with the banking regulatory bodies in the city. The authority will be financed by a 0.1% levy on all newly-paid insurance policy premiums.
The news was welcomed by the HKFI who hailed the move as “a historic milestone for the insurance industry in Hong Kong”, even if it had in the past expressed concerns about some of the measures floated by the regulator, which issued its first consultation paper on the topic in 2010.
“Since then and over the past five years, the HKFI has been working closely with all stakeholders, including Government officials and Legislators, to try to come up with a practical legislative framework which protects consumers and help grow the insurance industry. The HKFI is grateful to the Financial Services and the Treasury Bureau and the Insurance Authority for their readiness to listen to the views and legitimate concerns of the industry,” said Mr Mike Lee, Chairman of the HKFI.
“We are confident that working together with the new Independent Insurance Authority, we can help build Hong Kong into a world-class insurance hub in Asia Pacific,” added Mr Lee.