XN000022-1988-04-27 — Page 7

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WEDNESDAY, APRIL 27, 1988

MR JACOBS SAID THAT THERE WERE CURRENTLY NO PROVISIONS IN THE INSURANCE COMPANIES ORDINANCE GOVERNING OFFICIAL SECRECY OR THE DISCLOSURE OF INFORMATION.

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"THE INSURANCE AUTHORITY'S POSITION IS THEREFORE UNCERTAIN AND THIS CAUSES PROBLEMS FOR THOSE INVOLVED ON THE REGULATORY SIDE, HE SAID, ADDING THAT "CLAUSE 6 INSERTS NEW PROVISIONS ON SECRECY. DISCLOSURE OF INFORMATION AND EXAMINATION BY OUTSIDE AUTHORITIES,"

MR JACOBS EXPLAINED THAT THESE NEW PROVISIONS CREATED A GENERAL PROHIBITION AGAINST THE DISCLOSURE OF INFORMATION OBTAINED UNDER THE ORDINANCE AND, NOTWITHSTANDING THAT PROHIBITION, SPECIFIED IN WHAT CIRCUMSTANCES AND TO WHOM SUCH INFORMATION MIGHT BE DISCLOSED.

THIS WOULD ENABLE THE INSURANCE AUTHORITY TO INFORMATION ON AUTHORISED INSURERS WITH REGULATORY BODIES KONG AND INSURANCE SUPERVISORY AUTHORITIES OVERSEAS IN THE OF POLICY HOLDERS OR POTENTIAL POLICY HOLDERS.

IT WOULD ALSO BRING THE ORDINANCE INTO LINE WITH THE PROVISIONS OF THE BANKING ORDINANCE.

EXCHANGE IN HONG INTERESTS

RELEVANT

"ANY COMPANY WISHING TO CARRY ON ANY CLASS OF INSURANCE BUSINESS MUST FIRST SEEK AND OBTAIN AUTHORISATION FROM THE INSURANCE AUTHORITY," HE SAID.

HE FURTHER POINTED OUT THAT SECTION 8 OF THE ORDINANCE ENABLED THE AUTHORITY TO IMPOSE CONDITIONS, AS NECESSARY, FOR THE BETTER REGULATION OF THE INSURER AND THE PROTECTION OF POLICY HOLDERS, WHEREAS SECTION 12 PROVIDED THAT ANY SUCH CONDITIONS WOULD AUTOMATICALLY CRASE TO HAVE EFFECT FIVE YEARS AFTER THE DATE OF AUTHORISATION.

HOWEVER, THE AUTHORITY DID NEED TO IMPOSE CONDITIONS WERE OF A CONTINUING NATURE FOR THE PROTECTION OF POLICY HOLDERS.

WHICH

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MOREOVER, CLAUSE 3 AMENDED SECTION 12 TO GIVE THE AUTHORITY DISCRETION TO DETERMINE WHEN CONDITIONS IMPOSED UNDER AUTHORISATION SHOULD BE REVOKED.

THIS WOULD ALLOW A DISTINCTION TO BE DRAWN BETWEEN CONDITIONS IMPOSED FOR AN INITIAL PERIOD AND THOSE INTENDED TO BE OF A CONTINUING NATURE.

IN ADDITION, HE SAID THAT SECTION 40 OF THE ORDINANCE EMPOWERED THE INSURANCE AUTHORITY TO WITHDRAW AUTHORISATION WHERE AN AUTHORISED INSURER CEASED TO CARRY ON ANY INSURANCE BUSINESS, OR INSURANCE BUSINESS OF ANY CLASS, OR HAD NOT COMMENCED ΤΟ CARRY ON INSURANCE BUSINESS OF ANY CLASS WITHIN 12 MONTHS OF HIS BEING AUTHORISED FOR THAT CLASS.

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