XN000022-1985-12-04 — Page 29

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WEDNESDAY, DECEMBER 4, 1985

HE SAID ALL THESE PROBLEMS MIGHT REQUIRE LENGTHY AND CAREFUL STUDY AND CONSIDERATION BEFORE SOLUTIONS COULD BE FOUND BUT FOR THE PRESENT HE DID NOT WISH TO HINDER THE PROGRESS OF GOVERNMENT BUSINESS AND ABOVE ALL, HE DID NOT WISH TO PROLONG THE ANXIETIES AND SUFFERINGS OF THE VICTIMS AND THE IR FAMILIES.

MISS TAM SAID THE LEGISLATIVE COUNCIL AD HOC GROUP HAD DECIDED TO SUPPORT THE SCHEME ON THE UNDERSTANDING THAT THE PROPOSED PAYMENT OUT OF THE TAVA FUND WOULD ONLY BE AN +ONE-OFF+ EXERCISE.

SHE EXPLAINED THE PRINCIPLES UPON WHICH THE AD HOC GROUP HAD MADE ITS DELIBERATIONS.

+FIRSTLY WE QUESTIONED WHY AN EXCEPTION HAS TO BE

MADE FOR THESE FIVE COMPANIES AND WHAT WILL HAPPEN TO SIMILAR CASES IN THE FUTURE SECONDLY WE QUESTIONED WHY GOVERNMENT SHOULD COME TO THE AID OF PRIVATE ENTERPRISE AND ALLOW MOTOR INSURANCE TO HAVE INSOLVENCY FUND AND WHETHER WE CAN DIFFERENTIATE MOTOR INSURANCE FOR OTHER TYPES OF INSURANCE WHERE THERE IS A MANDATORY REQUIREMENT BY LAW FOR A PARTICULAR CLASS OF PERSONS TO TAKE OUT INSURANCE, FOR EXAMPLE, EMPLOYERS FOR EMPLOYEES AND THIRDLY, WHETHER THE PAY-OUT METHOD PROPOSED IS SATISFACTORY, SHE SAID.

MISS TAM SAID THE AD HOC GROUP HAD BEEN ASSURED BY THE ADMINISTRATION THAT AFTER TWO AND A HALF YEARS OF ENFORCEMENT OF MORE STRINGENT PRUDENTIAL CONTROL OVER INSURANCE COMPANIES UNDER THE INSURANCE COMPANIES ORDINANCE 1983, AND WITH FURTHER MEASURES TO FOLLOW, IT WAS NOT ENVISAGED THAT HISTORY WOULD KEEP REPEATING ITSELF.

+WE HAVE ALSO CONSIDERED THAT THE DOCTRINE OF CAVEAT EMPTOR (BUYERS BEWARE) MUST ALSO BE RELEVANT HERE IN THAT CUSTOMERS SHOULD CHOOSE A SOUND AND NOT A CHEAP INSURANCE COMPANY TO PURCHASE THE IR POLICIES AND BE RESPONSIBLE FOR THEIR OWN ACTS IF THEY FAIL TO PICK THE RIGHT ONE.

HOWEVER, SHE SAID, IT WAS THE HARDSHIP ALL ROUND THAT WE WISHED TO GIVE RELIEF TO AND THE FINANCIAL COMMITMENT WAS A FINITE ONE, 1.E. UP TO $100M.

AS THERE WAS A SURPLUS OF ABOUT 190M IN THE TAVA'S FUND, WE THEREFORE, ON BALANCE, DECIDED TO SUPPORT THE SCHEME, SHE SAID.

ON THE SECOND ISSUE, MISS TAM EXPLAINED THAT THE MOTOR INSURANCE INDUSTRY HAD A LONG TRADITION IN THE OPERATIONS OF MOTOR INSURERS' BUREAU IN OVERSEAS COUNTRIES TO SET UP FUNDS TO RE INSURE ITSELF AND HENCE BY TRADITIONAL PRACTICE DEPARTED FROM THE REST OF THE INSURANCE POLICIES WHICH WERE MANDATORY UNDER THE LAW.

+WE THEREFORE DO NOT CONSIDER IT IMPERATIVE THAT THE TAVA'S PAYMENT SHOULD FALL IN LINE WITH OTHER MANDATORY INSURNACE SCHEMES, SHE SAID.

/LASTLY, MISS