XN000022-1992-07-03 — Page 15

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FRIDAY, JULY 3, 1992

"WE BELIEVE THAT THE PRESCRIBED PERSON SHOULD BE ABLE то COMMUNICATE, TOGETHER WITH THE INSURER CONCERNED IF APPROPRIATE, WITH THE INSURANCE AUTHORITY (IA) ON MATTERS RELEVANT TO THE INSURANCE AUTHORITY'S FUNCTIONS, IN ORDER TO PROTECT THE INTERESTS OF POLICY HOLDERS AND PRESERVE THE INTEGRITY OF THE MARKET, THE SPOKESMAN SAID.

THERE ARE ALSO PROVISIONS IN THE BILL TO PROTECT THE PRESCRIBED PERSONS AGAINST ANY POSSIBLE LIABILITY THAT THEY MIGHT INCUR IN RESPECT OF BREACH OF DUTY OF CONFIDENTIALITY TO CLIENTS WHEN COMMUNICATING IN GOOD FAITH TO THE LA.

SUCH PROTECTION IS ALREADY AVAILABLE TO AUDITORS OF AUTHORISED INSTITUTIONS AND REGISTERED DEALERS.

"A CHANGE OR PROSPECTIVE CHANGE OF A PRESCRIBED PERSON MAY SIGNIFY THAT THERE ARE ASPECTS OF THE INSURER'S AFFAIRS WHICH COULD GIVE RISE TO PRUDENTIAL CONCERNS.

"IT IS THEREFORE PROPOSED THAT THE TA SHOULD BE NOTIFIED OF ANY SUCH CHANGE BY THE INSURER CONCERNED," THE SPOKESMAN SAID,

FOR SIMILAR REASONS, THE PRESCRIBED PERSONS WILL ALSO BE REQUIRED TO INFORM THE IA OF THEIR INTENTION TO RESIGN OR TO MAKE AN ADVERSE STATEMENT ON TUF AFFAIRS OF THEIR •LJENTS, THE SPOKESMAN ADDED.

INFORMATION

THE BILL ALSO SEEKS TO ENABLE THE JA TO DISCLOSE RELATING TO A PRESCRIBED PERSON TO THE APPROPRIATE PROFESSIONAL FOR THE PURPOSE OF ANY DISCIPLINARY PROCEEDINGS,

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AS REGARDS THE PROPOSAL, RELATING TO RETIREMENT SCHEMES MANAGEMENT BUSINESS, THE GOVERNMENT SPOKESMAN POINTED OUT THAT OPERATORS OF LONG-TERM INSURANCE BUSINESS ARE REQUIRED UNDER THE ORDINANCE TO SET ASIDE A LONG-TERM FUND ΤΟ MEET THE LIABILITIES ARISING FROM SUCH BUSINESS.

IN THE LIGHT OF THE GOVERNMENT'S INTENTION TO REGULATE OCCUPATIONAL RETIREMENT SCHEMES IN THE PRIVATE SECTOR, IT IS APPROPRIATE THAT RETIREMENT SCHEMES MANAGED BY INSURANCE COMPANIES SHOULD BE DESIGNATED AS A CLASS OF INSURANCE BUSINESS AND SUBJECT ΤΟ PRUDENTIAL CONTROL UNDER THE INSURANCE COMPANIES ORDINANCE, HE SAID.

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"THE LEGISLATIVE FRAMEWORK FOR THE REGULATION OF OCCUPATIONAL RETIREMENT SCHEMES REQUIRES THAT ASSETS OF A SCHEME SHOULD BE HELD SEPARATELY FROM THOSE OF THE EMPLOYER.

"WHILE ACCEPTING THAT THE ASSETS OF THE RETIREMENT SCHEME WHICH ARE SUBJECT TO AN INSURANCE ARRANGEMENT MEETS THE PRINCIPLE OF ASSET SEPARATION, IT IS IMPORTANT THAT EXPLICIT PROVISIONS ARE IN PLACE TO ENSURE THAT ADEQUATE ASSETS ARE SET ASIDE BY THE INSURER TO MEET LONG-TERM LIABILITIES, THE SPOKESMAN EXPLAINED.

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THE

HE SAID THE NEW CLASS OF LONG-TERM BUSINESS PROPOSED UNDER BILL WILL HAVE TWO COMPONENTS.

THE

/"THE FIRST