XN000022-1993-05-06 — Page 7

THURSDAY, MAY 6, 1993

INSURANCE COMPANIES (AMENDMENT) BILL 1993 TO BE GAZETTED TOMORROW

* * * *

THE

GOVERNMENT IS PROPOSING LEGISLATIVE AMENDMENTS AREAS

GOVERNMENT THE INSURANCE COMPANIES ORDINANCE, A IN SAID TODAY (THURSDAY).

ΤΟ THREE SPOKESMAN

THE INSURANCE COMPANIES (AMENDMENT) BILL 1993 TO BE GAZETTED TOMORROW (FRIDAY) SEEKS TO DELEGATE TO THE INSURANCE AUTHORITY CERTAIN

PRESENTLY

GOVERNOR MINOR POWERS

EXERCISED BY THE

IN COUNCIL, TO REQUIRE INSURERS TO GIVE NOTIFICATION OF CESSATION OF PLACE OF OR SIMILAR BUSINESS IN HONG KONG, OR OF COMMENCEMENT OF LIQUIDATION PROCEEDINGS, AND TO PROVIDE FOR ENHANCED LEVELS OF SOLVENCY MARGIN FOR LONG-TERM INSURERS.

POWERS EXPLAINING THE BACKGROUND TO THE PROPOSED DELEGATION OF TO THE INSURANCE AUTHORITY, THE SPOKESMAN SAID SECTION (8)(1)(C) OF AN ASSOCIATION OF THE INSURANCE COMPANIES ORDINANCE PROVIDES THAT UNDERWRITERS INTENDING TO CARRY ON ANY CLASS OF INSURANCE BUSINESS

LLOYD'S, OF OR FROM HONG KONG, WITH THE ONLY EXCEPTION APPROVED ONLY BY THE GOVERNOR IN COUNCIL.

IN

MIGHT

BE

SECTION

8 OF THE

ORDINANCE SETS OUT

CRITERIA THE

FOR

AUTHORISATION OF INSURERS TO CONDUCT INSURANCE BUSINESSES IN HONG KONG BY THE INSURANCE AUTHORITY.

"THE CRITERIA WHEREBY THE AUTHORITY MAY AUTHORISE A COMPANY

INSURANCE CARRY ON

BUSINESS WOULD APPLY TO AN ASSOCIATION

"THE SPOKESMAN SAID. UNDERWRITERS NO LESS THAN TO A COMPANY,

L

'AS

REQUIRED

TO

OF

FOR AUTHORISATION LEVEL OF RESPONSIBILITY THE UNDER THESE TWO SECTIONS IS COMPARABLE, IT IS PROPOSED THAT THE POWER TO THE INSURANCE TO APPROVE

SECTION 6 WOULD BE TRANSFERRED UNDER AUTHORITY BY CLAUSE 3 OF THE BILL, HE SAID.

"I

SECTION 19(1) OF THE ORDINANCE EMPOWERS THE GOVERNOR IN COUNCIL ΤΟ PRESCRIBE CERTAIN AGREEMENTS OR ARRANGEMENTS AS UNDESIRABLE AND REQUIRE SPECIFIC INFORMATION

INTO STICH FROM AN INSURER ENTERING "PRESCRIBED" AGREEMENTS OR ARRANGEMENTS WITHIN SUCH PERIOD AS HE MAY PRESCRIBE.

OF

THE

IN

8

OF

"AS SUCH DUTIES ALSO FALL WELL WITHIN THE COMPETENCE AUTHORITY, WE HAVE PROPOSED THAT THE GOVERNOR IN COUNCIL'S POWERS SECTION 19 BE TRANSFERRED TO THE INSURANCE AUTHORITY BY CLAUSE THE BILL, THE SPOKESMAN SAID.

ON

"

AND

OF

AN

THE

IN

THE NOTIFICATION OF CESSATION OF PLACE OF BUSINESS LIQUIDATION OR SIMILAR PROCEEDINGS, THE SPOKESMAN SAID AT PRESENT INSURER INCORPORATED OUTSIDE HONG KONG IS NOT REQUIRED TO NOTIFY INSURANCE AUTHORITY WHEN IT EITHER CLOSES ITS PLACE OF BUSINESS HONG KONG OR BECOMES SUBJECT TO LIQUIDATION OR SIMILAR PROCEEDINGS.

COMPANIES NOTIFIED

"ALTHOUGH SUCH RETURNS ARE REQUIRED UNDER THE ORDINANCE, THE PRESENT ARRANGEMENTS WHEREBY THE AUTHORITY IS OF THESE EVENTS THROUGH THE COMPANIES REGISTRY ARE INADEQUATE TO ALLOW THE AUTHORITY TO TAKE TIMELY ACTION IN RESPECT OF AILING INSURERS, SAID.

I HE

/"CLAUSE 17