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THURSDAY, NOVEMBER 11, 1993
MORE PROTECTION PROPOSED FOR INSURED
THE GOVERNMENT HAS PROPOSED TO AMEND THE INSURANCE COMPANIES ORDINANCE TO ENHANCE PROTECTION TO POLICY HOLDERS' INTERESTS BY PROVIDING LEGISLATIVE SUPPORT TO THE SELF-REGULATION OF AGENTS WHO ARE APPOINTED BY THE INSURER AND BROKERS WHO ACT FOR THE INSURED.
DETAILS OF THE PROPOSED AMENDMENTS ARE CONTAINED INSURANCE COMPANIES
(NO.3) BILL 1993 TO BE TOMORROW (FRIDAY).
(AMENDMENT)
IN THE GAZETTED
INSURERS
THE
A GOVERNMENT SPOKESMAN SAID TODAY (THURSDAY) THAT OPERATING IN HONG KONG WERE SUBJECT TO PRUDENTIAL SUPERVISION BY INSURANCE AUTHORITY UNDER THE INSURANCE COMPANIES ORDINANCE.
IN
THE
"THE LAW REFORM COMMISSION OF HONG KONG, IN A REPORT ISSUED 1986, HIGHLIGHTED AN ABSENCE OF PROFESSIONAL STANDARDS AMONG INSURANCE INTERMEDIARIES AND A CONFUSION OVER THE ROLES AND THEREFORE THE LIABILITIES OF THE AGENTS AND BROKERS, THE SPOKESMAN SAID.
"I
"PUBLIC COMPLAINTS INCLUDING MISREPRESENTATION, INADEQUATE EXPLANATION OF INSURANCE CONTRACTS AND MISAPPROPRIATION OF PREMIUMS RECEIVED INDICATED THAT SOME FORM OF SUPERVISION POLICY HOLDERS' INTERESTS WERE AT RISK, HE ADDED.
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WAS NECESSARY AS
ON THE RECOMMENDATION OF THE LAW REFORM COMMISSION, THE INSURANCE INDUSTRY ESTABLISHED A WORKING GROUP IN 1987 TO DEVELOP PROPOSALS FOR THE SELF-REGULATION OF INSURANCE AGENTS AND BROKERS.
THE SPOKESMAN SAID THE RECOMMENDATIONS RELATED MAINLY TO THE ADOPTION BY INSURERS OF VOLUNTARY CODES OF PRACTICE TO BE BACKED BY STATUTE AS IN THE UNITED KINGDOM.
IN JANUARY 1993, A CODE OF PRACTICE FOR ADMINISTRATION OF AGENTS WAS ADOPTED BY THE HONG KONG FEDERATION OF INSURERS (FEDERATION).
THE PROFESSIONAL BODY FOR BROKERS, THE HONG KONG CONFEDERATION OF INSURANCE BROKERS (CONFEDERATION), ESTABLISHED IN FEBRUARY 1993, ALSO REQUIRES ITS MEMBERS TO CONFORM WITH THE RULES AND REGULATIONS FOR MEMBERSHIP AND PROFESSIONAL CONDUCT DEVELOPED FOR BROKERS,
DESPITE THE INDUSTRY'S EFFORTS AT SELF-REGULATION, HE SAID THERE CONTINUED TO BE COMPLAINTS FROM MEMBERS OF THE PUBLIC AGAINST INSURANCE AGENTS AND BROKERS.
"BOTH THE FEDERATION AND THE CONFEDERATION ARE CONCERNED THAT SELF-REGULATION HAS NOT PROVED FULLY EFFECTIVE IN THE ABSENCE OF
STATUTORY BACKING.
"VOLUNTARY CODES,
ALONE ARE
RULES, REGULATIONS AND CRITERIA INSUFFICIENT BECAUSE THEY CANNOT PROVIDE AN EFFECTIVE SANCTION AGAINST NON-COMPLIANCE BY AGENTS, BROKERS AND INSURERS," HE SAID.
/CLAUSE 4