WEDNESDAY, JANUARY 7, 1987
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+THESE INSURERS ARE NOT REQUIRED BY LEGISLATION IN THEIR RESPECTIVE COUNTRIES OF INCORPORATION TO IDENTIFY SEPARATELY THEIR LONG-TERM ASSETS TO MATCH THEIR LONG-TERM LIABILITIES,+ MR JACOBS SAID.
+COMPLIANCE WITH THE REQUIREMENTS WOULD THEREFORE REQUIRE EXTENSIVE CHANGES IN THEIR WORLDWIDE ACCOUNTING SYSTEMS, OR EVEN A TOTAL OF RESTRUCTURING THEIR BUSINESS. THIS COULD BE SO EXPENSIVE THAT SOME COMPANIES MIGHT FEEL OBLIGED INSTEAD TO WITHDRAW FROM HONG KONG, HE SAID.
+THE INSURERS CONCERNED ARE WELL ESTABLISHED AND OF HIGH INTERNATIONAL STANDING. THEIR WITHDRAWAL WOULD CERTAINLY NOT BE IN THE INTERESTS OF HONG KONG AS A FINANCIAL AND INSURANCE CENTRE.+
MR JACOBS SAID THE PROPOSED AMENDMENT WOULD ENABLE THESE REPUTABLE OVERSEAS COMPANIES TO STAY ON IN HONG KONG AND AT THE SAME TIME SAFEGUARD THE HONG KONG POLICY-HOLDERS' INTERESTS.
THE BILL ALSO CONTAINED ANCILLARY PROVISIONS RELATING TO THE MODIFICATION OR VARIATION OF THE ACCOUNTING REQUIREMENTS IN THE ORDINANCE WHERE NECESSARY.
MR JACOBS SAID: +IN EXERCISING HIS DISCRETION, THE INSURANCE AUTHORITY WILL ADOPT A SET OF GUIDELINES WHICH TAKE INTO ACCOUNT THE FINANCIAL CONDITION OF THE INSURER, THE EXTENT OF ITS LONG- TERM BUSINESS IN HONG KONG, THE QUALITY OF SUPERVISION BY THE RESPECTIVE AUTHORITY OF EACH INSURER'S COUNTRY OF INCORPORATION AND OTHER RELEVANT CIRCUMSTANCES. THE GUIDELINES WILL BE MADE AVAILABLE TO POTENTIAL APPLICANTS.-
HE EMPHASISED THAT WHILE THE AMENDMENTS, IF ENACTED, WOULD NOT PROVIDE IMPROVED PROTECTION FOR HONG KONG POLICY-HOLDERS OF THE OVERSEAS INSURERS CONCERNED NEITHER WOULD THEY ERODE THE EXISTING DEGREE OF PROTECTION AVAILABLE.
+THE ACCOUNTS KEPT WOULD EQUALLY FACILITATE THE SECURING OF THE NECESSARY ASSETS BY THE INSURANCE AUTHORITY TO MEET THE SE INSURERS' HONG KONG LIABILITIES SHOULD THIS PROVE NECESSARY+ HE SAID.
+PROTECTION FOR POLICY-HOLDERS HAS BEEN, AND WILL CONTINUE TO BE GENERALLY ENHANCED THROUGH DIALOGUE WITH SUPERVISORY AUTHORITIES OF THE RESPECTIVE COMPANIES' COUNTRIES OF ORIGIN,
THE BILL ALSO SOUGHT TO ADD A NEW PROVISION TO INDEMNIFY THE INSURANCE AUTHORITY AGAINST CLAIMS FOR DAMAGES IN CONNECTION WITH THE BONA FIDE EXERCISE OF THE AUTHORITY'S FUNCTIONS UNDER THE ORDINANCE.
MR JACOBS SAID THE PROPOSED AMENDMENTS HAD THE SUPPORT OF THE INSURANCE ADVISORY COMMITTEE AND THE LIFE INSURANCE COUNCIL OF HONG KONG.
DEBATE ON THE BILL WAS ADJOURNED.