XN000022-1987-06-12 — Page 7

FRIDAY, JUNE 12, 1987

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ANY COMPANY

HE SAID THAT UNDER SECTION 7 OF THE ORDINANCE, WHICH WISHES TO CARRY ON ANY CLASS OF INSURANCE BUSINESS MUST APPLY TO THE INSURANCE AUTHORITY FOR AUTHORISATION TO DO 80.

SECTION 8(2) OF THE ORDINANCE STIPULATES THAT THE AUTHORITY SHALL NOT AUTHORISE A COMPANY IF ANY DIRECTOR OR CONTROLLER OF THE COMPANY IS NOT A FIT AND PROPER PERSON TO HOLD THAT POSITION. 8(3) SPECIFIES THAT THE AUTHORITY SHALL NOT AUTHORISE A UNLESS THE COMPANY SATISFIES CERTAIN CONDITIONS RELATING TO ITS NET ASSETS, CAPITAL AND MANAGEMENT.

SECTION COMPANY

THE SPOKESMAN POINTED OUT THAT THE REQUIREMENTS IN SECTION 8(2) AND (3) WERE INTENDED ΤΟ BE THE MINIMUM REQUIREMENTS. "IF THE INSURANCE AUTHORITY HAS ΤΟ AUTHORISE ANY APPLICANT WHO SATISFIES THESE MINIMUM CONDITIONS, IT IS DIFFICULT TO EXERCISE MEANINGFUL QUALITY CONTROL OVER ENTRY TO THE LOCAL INSURANCE MARKET. THIS COULD RESULT IN THE PROLIFERATION OF LOW QUALITY INSURANCE COMPANIES IN HONG KONG." HE SAID.

"IN THE INTEREST OF POTENTIAL POLICY HOLDERS, THE BILL WILL AMEND SECTION 8 TO PROVIDE THE AUTHORITY WITH EXPRESS POWER TO REFUSE AUTHORISATION ON A GROUND NOT SPECIFIED IN SECTION 8(2) AND

(3), HE

ADDED.

THE SPOKESMAN SAID THE BILL ALSO PROVIDES THAT ANY COMPANY WHOSE APPLICATION HAS BEEN REFUSED BY THE AUTHORITY UNDER THE PROPOSED AMENDMENT MAY APPEAL TO THE FINANCIAL SECRETARY.

"IN THE EVENT OF SUCH AN APPEAL, THE FINANCIAL SECRETARY WOULD REVIEW THE CASE AND MAKE AN INDEPENDENT AND FINAL DECISION," HE SAID.

BOTH THE INSURANCE COUNCIL OF HONG KONG AND THE LIFE INSURANCE COUNCIL HAVE BEEN CONSULTED AND EXPRESSED FULL SUPPORT FOR THE PROPOSED AMENDMENTS.

TO ASSIST POTENTIAL APPLICANTS, THE INSURANCE AUTHORITY HAS DRAWN UP SOME ADMINISTRATIVE GUIDELINES WHICH IDENTIFY IN GENERAL TERMS THE AUTHORISATION CRITERIA.

THESE GUIDELINES WILL BE MADE AVAILABLE TO COMPANIES PROPOSING TO APPLY TO BE AN AUTHORISED INSURER.

THE INSURANCE COMPANIES (AMENDMENT) (NO. 2) BILL 1987 WILL INTRODUCED INTO THE LEGISLATIVE COUNCIL ON JUNE 24.

COMMENTS ON THE BILL MAY BE SENT TO THE INSURANCE OFFICER QUEENSWAY GOVERNMENT OFFICES OR THE OMELCO OFFICE AT JACKSON ROAD,

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