WEDNESDAY, FEBRUARY 2, 1983
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TO AVOID ANY EXCESSIVE BURDEN ON INSURANCE COMPANIES, CLAUSE 17 (2) OF THE BILL IS DRAFTED TO CONFER WIDE POWER OF DISCRETION ON THE INSURANCE AUTHORITY TO APPROVE MODIFICATIONS TO ACCOUNTING REQUIREMENTS IN THE THIRD SCHEDULE, MR JACOBS SAID.
HE ADDED THAT ALTHOUGH THE DISCRETION IS WIDE, THE PROVISION IS DESIGNED ESSENTIALLY TO CATER FOR INSURERS WHO HAVE PROVIDED COMPREHENSIVE ACCOUNTING INFORMATION IN OTHER JURISDICTIONS.
IT IS UNLIKELY, HE SAID, THAT THE AUTHORITY'S POWER TO GRANT MODIFICATIONS WILL BE OF MUCH VALUE TO AN INSURER WHO CARRIES ON BUSINESS AND REPORTS ONLY IN HONG KONG.
AS THE INSURANCE INDUSTRY IS DIVERSE, IT IS DIFFICULT TO COVER IN THE LEGISLATION EVERY TYPE OF INSURANCE COMPANY, MR JACOBS SAID.
TO COVER THIS SITUATION AND TO MAINTAIN FLEXIBILITY, CLAUSE 53 OF THE BILL EMPOWERS THE GOVERNOR-IN-COUNCIL TO GRANT TO AN INSURER OR REINSURER AN EXEMPTION OR MODIFICATION IN RESPECT OF ANY PROVISION IN THE BILL.
CLAUSE 5 OF THE BILL WILL ALSO BE AMENDED TO SPECIFY THAT THE INFORMATION TO BE INCLUDED IN A REGISTER OF AN INSURANCE COMPANY WILL BE ENTIRELY FACTUAL AND WILL NOT BE CONFIDENTIAL
IN NATURE, MR JACOBS REPORTED.
IT HAD BEEN ARGUED THAT REINSURERS DESERVE SPECIAL TREATMENT BECAUSE OF THE NATURE OF THEIR OPERATIONS.
+WHILE REINSURERS DO HAVE SOME PROBLEMS DIFFERENT FROM THOSE ENCOUNTERED BY DIRECT INSURERS, THE ADMINISTRATION HAS YET TO BE CONVINCED AS TO THE KIND OF CONCESSIONS, IF ANY, THAT SHOULD BE MADE AVAILABLE TO THEM.
I WOULD, THEREFORE, PREFER TO REVIEW THIS ISSUE IN THE LIGHT OF EXPERIENCE GAINED THROUGH SUPERVISION OF REINSURERS UNDER THE LEGISLATION,+ MR JACOBS SAID.
AMENDMENTS TO 16 CLAUSES AND THE SECOND AND THIRD SCHEDULES TO THE BILL WERE MOVED BY NINE UNOFFICIAL MEMBERS WHO MADE UP AN AD HOC STUDY GROUP UNDER THE CONVENERSHIP OF MR T.S. LO.
THEY ARE THE HON T.S. LO, THE HON PETER C. WONG, THE HON ALLEN LEE, THE HON ANDREW SO, THE HON WONG PO YAN, THE HON W.C.L. BROWN, THE HON K.C. CHAN, THE HON STEPHEN CHEONG, AND THE HON MAR FÀ TAM.
THE BILL WAS MOVED THROUGH THE COMMITTEE STAGE AND ITS THIRD READING.
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