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Decision on Mandatory Provident Fund Scheme important
One very important development for both Hong Kong and the insurance industry would be a decision on the Mandatory Provident Fund Scheme, the Financial Secretary, Sir Hamish Macleod, said today (Thursday).
Speaking at the Annual Dinner of the Hong Kong Federation of Insurers, Sir Hamish said, under this proposal all employers and employees would be required jointly to contribute 10 per cent of salary into an occupational retirement scheme which employees might draw down upon reaching the qualifying age of 65,
"The assets of these schemes will need to be invested.
"Thus insurers may expect phenomenal growth in the retirement fund portion of their business." Sir Hamish said.
"If insurers are to succeed in retaining a healthy portion of it, the range of retirement products they offer must be promoted vigorously, transparently and attractively.
"This is a challenge which I am sure the insurance industry is more than willing and capable of meeting," he said.
Sir Hamish said Insurance had become an important industry in its own right, contributing substantially to the prosperity of Hong Kong.
"The industry had recorded annual growth rates of 20 per cent and 30 per cent in recent years, at the same time evolving in sophistication and complexity," he said.
He said the Insurance Companies Ordinance was amended over the years to keep up with rapidly changing conditions in the marketplace and to improve protection of the interests of the insuring public.
But change continued, and this year further amendments will be introduced. These amendments seek:
first, to define the functions and duties of the Insurance Authority;
secondly, to permit the beneficial exchange of information between the Authority and other financial regulators;