DRAFT SPEECH BY HON MARIA TAM, OBE, JP
LEGISLATIVE COUNCIL - 4.12.85
Traffic Accident Victims Assistance Fund Supplementary Scheme
Sir,
Under the convenership of the Hon K C CHAN, an Ad Hoc Group was set up to look into the rationale behind the proposal of this Supplementary Scheme which enables payment to be made out of the TAVAS fund to victims of traffic accidents who were unable to obtain compensation or damages from 5 insurance companies which had gone into liquidation since 1980.
Firstly we questioned why an exception has to be made for these companies; secondly we questioned why motor insurance has to be singled out from other types of insurance where there is a mandatory requirement by law for a particular class of persons to take out insurance, for example, employers for employees; and thirdly, whether the pay-out method proposed is satisfactory.
After examining the facts laid before the Ad Hoc Group by the Administration we have come to the following views:-
(1)
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This proposed ex-gratia payment out of the TAVAS fund can only be justified as an "one-off" exercise. We were assured by the Administration that after 2 1/2 years of enforcement of more stringent prudential control over insurance companies under the Insurance Companies Ordinance 1983, and with further measures follow, it is not envisaged that history will keep repeating itself. We have also considered that the doctrine of caveat emptor (buyers beware) must also be relevant here in that customers should choose a sound and not a cheap insurance company to purchase their policies and be responsible for their own acts if they do not choose the right one. And those who had already