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SUNDAY, JANUARY 6, 1985

+ THE ORDINANCE NOW PRESCRIBES REQUIREMENTS GOVERNING THE FITNESS OF DIRECTORS AND CONTROLLERS OF INSURANCE COMPANIES AND PROVIDES STRINGENT FINANCIAL AND OTHER REQUIREMENTS.

+ IT ALSO CONFERS CONSIDERABLE POWERS OF INVESTIGATION AND INTERVENTION BY THE INSURANCE AUTHORITY FOR THE BETTER PROTECTION OF POLICYHOLDERS AND OTHERS, MR GLEESON SAID.

THE TRANSITIONAL PROVISIONS OF THE NEW LEGISLATION HAD TO BE COMPLIED WITH BEFORE MAY 15 LAST YEAR. SOME COMPANIES HAD FAILED OR PREFERRED NOT TO COMPLY, WITH THE RESULT THAT 46

INSURANCE COMPANIES HAD THE IR AUTHORISATION WITHDRAWN BY THE END OF DECEMBER 1984.

FOUR OF THE WITHDRAWN COMPANIES WERE WOUND UP ON THE PETITION OF THE INSURANCE AUTHORITY. THE REMAINING 42 WITHDRAWN COMPANIES WERE EITHER DORMANT OR WERE UNABLE TO COMPLY WITH THE NEW

LEGISLATION. MOST OF THEIR INSURANCE POLICIES HAD BEEN RUN OFF+ AND THEIR INSURANCE CLAIMS WERE IN THE PROCESS OF BEING SETTLED IN AN ORDERLY MANNER.

DURING THE SAME PERIOD, HOWEVER, 23 NEW COMPANIES WERE AUTHORISED TO CARRY ON INSURANCE BUSINESS UNDER THE NEW LEGISLATION. MOST OF THESE WERE OVERSEAS COMPANIES, INCLUDING THREE FROM THE UNITED KINGDOM, TWO FROM CANADA TWO FROM BERMUDA, AND ONE EACH FROM CHINA, MALAYSIA, SINGAPORE, BAHAMAS, BELGIUM, LUXEMBOURG, NEW ZEALAND, SWEDEN AND SWITZERLAND.

THIS REFLECTED INCREASING OVERSEAS INTEREST IN HONG KONG'S INSURANCE MARKET, MR GLEESON SAID.

LAST YEAR ALSO SAW THE TIGHTENING OF THE INSURANCE AUTHORITY'S REGULATION OF AUTHORISED INSURANCE COMPANIES.

MR GLEESON SAID HE HAD EXERCISED HIS POWERS OF INTERVENTION IN RESPECT OF 32 INSURANCE COMPANIES DURING THE YEAR FOR THE BETTER PROTECTION OF POLICYHOLDERS AND OTHER CLAIMANTS.

THIS INTERVENTIONARY ACTION INCLUDED REQUIRING COMPANIES TO CEASE WRITING NEW INSURANCE BUSINESS, LIMIT THEIR PREMIUM INCOME, MAINTAIN ASSETS IN HONG KONG, KEEP ASSETS IN THE CUSTODY OF APPROVED TRUSTEES. IT ALSO INVOLVED CONDUCTING INVESTIGATIONS INTO COMPANIES' ACTIVITIES AND THEIR FINANCIAL POSITION,

AS AT DECEMBER 31 LAST YEAR, THERE WERE 284 AUTHORISED INSURANCE COMPANIES OPERATING IN HONG KONG.

OF THESE 130 WERE INCORPORATED IN HONG KONG, THE REMAINING 154 COMPANIES CAME FROM 26 COUNTRIES, INCLUDING 50 FROM THE UNITED KINGDOM, 30 FROM THE UNITED STATES, NINE FROM BERMUDA, EIGHT FROM JAPAN, SEVEN FROM SINGAPORE, SEVEN FROM SWITZERLAND, SIX FROM CANADA AND FIVE FROM FRANCE.

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