Financial and Monetary Affairs 89
Since July 6, 2010, ILAS products satisfying the requirements of the Capital Investment Entrant Scheme (CIES) have been recognised as eligible collective investment schemes under the CIES. Insurers authorised to carry on Class C business under the ICO have also been permitted to act as financial intermediaries for the purpose of the CIES with effect from October 14, 2010. To enhance investor protection, the post-sales calls (audio-recorded) requirement will be applied to all applicants of ILAS products for CIES purpose. ILAS products sold for CIES purpose requires prior approval of the SFC and the Immigration Department.
As a member of the IAIS, the IA contributes to the development of international standards in insurance supervision. The IAIS has been analysing the financial crisis and its impact on the global insurance industry in order to identify areas for reform, with particular emphasis on enhancing group and cross sectoral supervision. The IA will keep in view any new standards promulgated by the IAIS and will consider adopting them in Hong Kong, taking local circumstances into account.
In addition, the IA will continue to participate in supervisory colleges so as to work closely with regulators in other jurisdictions in regulating major insurance groups.
Mandatory Provident Fund Schemes and Occupational Retirement Schemes
Main Features
On December 1, 2000, the MPF System was implemented to help encourage the workforce to save and invest for their retirement. It is a privately managed, employment-related mandatory system of provident fund schemes. Unless exempted, employees and self-employed people aged between 18 and 65 are required to join MPF schemes.
The employer and employee are each required to contribute five per cent of the employee's relevant income to a registered MPF scheme, subject to the maximum and minimum levels of income for contribution purposes. The accrued benefits are fully vested in the scheme members and can be transferred when employees change employment or cease to be employed. A self-employed person has to contribute 5 per cent of his or her relevant income. In normal circumstances, benefits must be preserved until the scheme member attains the retirement age of 65. By the end of 2010, 99 per cent of employers (about 244 000), 99 per cent of relevant employees (2 261 600) and 80 per cent of self-employed persons (260 500) had participated in MPF schemes. Total MPF assets amounted to about $365.4 billion.
Unlike the compulsory MPF schemes, occupational retirement schemes registered under the Occupational Retirement Schemes Ordinance (ORSO) are
8 The description of Class C is linked long term and its nature of business is effecting and carrying out contracts of insurance on human life or contracts to pay annuities on human life where the benefits are wholly or parly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contracts) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified).