XN000022-1973-03-02 — Page 18

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Friday, March 2, 1973

"Legislation in Hong Kong dealing with insurance matters dates back

S

the Fire

to the beginning of the century. The first piece of legislation

Insurance Companies Ordinance was enacted on February 7, 1908. The last

was completed in 1961 by the codification of the law relating to marine insurance.

In the intervening years there were five other ordinances ranging from the Life Insurance Companies Ordinance which has seen some 20 amendments since its enactment in 1908 to the Motor Vehicles Insurance (Third Party Risks) which

became law in 1951.

Deposits

"A feature common to the Fire and Marine Insurance Companies Deposit Ordinance, the Life Insurance Companies Ordinance and the Motor Vehicles insurance Ordinance is that each contains a provision for deposits to be made by bodies wishing to transact the insurance business to which they apply. Fire and Marine Insurance Companies are required to deposit $100,000 in cash or acceptable securities in respect of each class of business; Life Insurance Companies $200,000; and Motor Vehicle Insurance Company may be required to deposit up to $400,000. In addition, Life Insurance Companies are required to ensure that their assets are never less than the aggregate of their liabilities and the amount they are required to deposit.

"As the law now stands Fire, Marine and Life Insurance Companies which can show compliance with British insurance legislation and, in certain cases, Commonwealth deposit requirements need not make the deposits specified in the ordinances and the Governor in Council has discretion to exempt Motor Vehicle

Insurers from making deposits. In the case of Motor Vehicle Insurers, however, the legislation requires registration of such insurers to be authorised only after their financial stability has been established.

"The