2
(2)
paid the victims and become bankrupt (and there are at least 3 cases here) should not be reimbursed. However, it is the hardship all round that we wish to give relief to and the financial commitment is a finite one, i.e. up to $100m. As there is a surplus of about $180m in the TAVAS fund, we therefore, on balance, decided to support the scheme.
On the second issue the motor insurance industry has a long tradition in the operations of Motor Insurers' Bureau in overseas countries to set up funds to, so to speak, reinsure itself; and hence by traditional practice depart from the rest of the insurance policies which are mandatory under the law. We therefore do not consider it imperative that the TAVAS payment should fall in line with other mandatory insurance schemes.
(3) Finally, under the TAVAF Ordinance, Cap. 229, TAVAS
fund can only be paid to traffic accident victims, NOT the insured. Hence of the 135 cases where the insured person had paid, in part or in full, damages to the victims, these insured persons must NOW rely on the victims to claim payments from the fund and sign an undertaking to reimburse them. I hope that there will be ample publicity in calling for the cooperation of the victims because their cooperation is paramount to enable this proposal to achieve its objectives.
We do not see fit to amend the TAVAS Ordinance and make it possible for payments to be made to the insured because this is an "one-off" exercise.
In short, we accept the proposals before Council with the observation that prudential control over insurance companies must be made effective, that basically "buyers beware" is a sound