In Hong Kong, the Insurance Authority (IA) will replace the Office of the Commissioner of Insurance (OCI), a government department, and will regulate insurance companies starting June 26, 2017. The OCI will be disbanded on the same day. Certain other pieces of subsidiary legislation, which were published in the Gazette on April 21, 2017, also take effect from June 26, 2017.
The IA is a regulatory body independent of the government and the industry. Empowered by the Insurance Ordinance (Cap. 41), the IA's principal function is to regulate and supervise the insurance industry to promote the general stability of the insurance industry and protect policy holders. Since its establishment in December 2015, the IA has been preparing for the takeover of regulatory functions in phases. The enhanced regulatory regime has expanded the scope of regulatory oversight over insurance companies. Within two years, the IA will further take over the direct regulation of insurance intermediaries from the three Self-Regulatory Organizations (SROs) through a statutory licensing regime, thus protecting policyholders in a more comprehensive manner. The three SROs are the Insurance Agents Registration Board (established under the Hong Kong Federation of Insurers), the Hong Kong Confederation of Insurance Brokers, and the Professional Insurance Brokers Association. Upon completing the changeover, the IA will start off with about 180 staff, gradually expanding to about 300 when it starts regulating insurance intermediaries.
The establishment of the IA and its initial years of operation will be funded by the government. In the long run, the IA has to be financially independent of the government and recover its operating costs. The Insurance Ordinance provides for the IA to collect an annual authorization fee from insurance companies and user fees for specific services with effect from June 26, 2017. The IA is required by law to set up two Industry Advisory Committees to advise it, one on matters relating to long-term business and one on general business. A separate subsidiary legislation for the collection of a levy on premiums from policy holders with effect from January 01, 2018 has been submitted to the Legislative Council for vetting.
Keywords: Asia Pacific, Insurance, Hong Kong, IA, OCI, Insurance Ordinance
Previous ArticleEIOPA Publishes Its Sixth Consumer Trends Report
APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
EC adopted a package that includes the digital finance and retail payments strategies and the legislative proposals for regulatory frameworks on crypto-assets and digital operational resilience.
ECB published an opinion (CON/2020/22) on proposals for regulations amending the securitization framework of EU, in response to the COVID-19 pandemic.
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
MAS published amendments to Notice 637 on the risk-based capital adequacy requirements for reporting banks incorporated in Singapore.
FCA announced that it will move firms to RegData from Gabriel in the coming months in stages, based on the reporting requirements of firms.
ISDA issued a letter to regulators to flag that it now expects the supplement to the 2006 ISDA Definitions and the Interbank Offered Rate (IBOR) Fallbacks Protocol to be effective around mid- to late-January 2021.
APRA has concluded its review of the comprehensive plans of authorized deposit-taking institutions for the assessment and management of loans with repayment deferrals.
ESAs (EBA, EIOPA, and ESMA) published the first joint report that assesses risks in the financial sector since the outbreak of the COVID-19 pandemic.
BoE and HM Treasury confirmed that the COVID Corporate Financing Facility (CCFF) will close for new purchases of commercial paper, with effect from March 23, 2021.