MONDAY, OCTOBER 28, 1991
MR SULLIVAN NOTED THAT OF THE SIX LIQUIDATIONS THAT TOOK PLACE OVER THE PAST 18 MONTHS, AT LEAST THREE CASES WERE AGENCY-RELATED.
HE URGED THE INSURERS TO ESTABLISH THE INSURERS CODE OF SUPERVISION FOR AGENTS AND THE DEVELOPMENT OF A REGISTER OF AGENTS.
MR SULLIVAN POINTED OUT THAT SELF-REGULATION COULD OF COURSE GO SOME CONSIDERABLE WAY IN AVOIDING THE DANGERS OF OVER-REGULATION.
"MY OFFICE HAS GIVEN ITS SUPPORT TO THE INDUSTRY FOR THESE SELF-REGULATORY MOVES. IT IS NOW VERY TIMELY FOR DEVELOPMENTS IN THIS AREA TO TAKE PLACE, HE SAID.
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HE NOTED THAT THE HONG KONG SOCIETY OF INSURANCE BROKERY
LIMITED AND THE HONG KONG INSURANCE BROKERS ASSOCIATION MERGED TO FORM THE HONG KONG CONFEDERATION OF INSURANCE BROKERS LIMITED,
HIGHLY PROFESSIONAL ASSOCIATION INDEPENDENT INTERMEDIARIES.
OF QUALIFIED
EXPERIENCED PROFESSIONAL.
HE SAID THE GOVERNMENT WARMLY SUPPORTED THE FORMATION OF THE CONFEDERATION.
"MEMBERS OF THE PUBLIC PLACING THEIR INSURANCE THROUGH A MEMBER OF THE CONFEDERATION WILL BE ASSURED OF GETTING EXPERT ADVICE BUPPLIED BY INDEPENDENT INTERMEDIARIES WHO ARE PROFESSIONALLY QUALIFIED TO GIVE THAT ADVICE, HAVE OBTAINED PROFESSIONAL INDEMNITY INSURANCE, HAVE GUARANTEED PROFESSIONAL LEVELS OF SERVICE AND COMPLY WITH STRICT RULES REGARDING THE HANDLING OF THEIR CLIENTS' MONEY, HE SAID.
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ON UNDER-RESERVING, MR SULLIVAN SAID THE SERIOUSNESS OF THE GENERAL UNDER-RESERVING BY INSURERS IN THE COMPULSORY LINES OF BUSINESS WAB, IN MANY CASES, EXACERBATED BY THE LIMITED CAPITAL BASES OF THE INSURERS CONCERNED.
REQUIRING THOSE
"THE INSURANCE AUTHORITY IS NOW INCREASINGLY INSURERS WHERE IT IS CONSIDERED THAT UNDER-RESERVING IS A PROBLEM UNDERTAKE INDEPENDENT ACTUARIAL INVESTIGATIONS AS TO THE ADEQUACY THE OUTSTANDING CLAIMS AND UNEXPIRED RISKS RESERVES.
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"IN EACH CASE WHERE AN INDEPENDENT ACTUARIAL INVESTIGATION НАЯ BEEN REQUIRED, SIGNIFICANT UNDER-RESERVING HAS BEEN REVEALED, IN SOME CASES TO AN EXTENT WHICH SERIOUSLY THREATENS THE FINANCIAL SECURITY OFFERED TO THE POLICY HOLDERS BY THE INSURERS CONCERNED.
"REMEDIAL MEASURES ARE BEING TAKEN BUT THERE IS, I BELIEVED, A NEED FOR GREATER PROFESSIONAL DISCIPLINE BY INSURERS WHICH TRANSACT SIGNIFICANT VOLUMES OF BUSINESS IN THE MORE DIFFICULT TO UNDERWRITE <"AND' MANAUS LINE" OF BUSINESS.
"THE REQUIREMENT FOR AN INDEPENDENT ACTUARIAL VALUATION OF THE ADEQUACY OF GENERAL BUSINESS RESERVES WILL BE AN ONGOING FEATURE OF THE SUPERVISORY SYSTEM IN HONG KONG, ALTHOUGH SUCH REQUIREMENTS WILL CONTINUE TO BE MADE ON A SELECTIVE BASES," HE SAID.
LOOKING INTO THE FUTURE OF THE INSURANCE INDUSTRY, MR SULLIVAN SAID THE HONG KONG MARKET WAS ONE OF THE FEW REGIONAL MARKETS THAT HAD ENJOYED CONSISTENT OVERALL PROFITABILITY OVER THE PAST YEARS.
/"THE FUTURE
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