XN000022-1995-02-15 — Page 39

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In addition, the Bill proposes to make a number of other amendments to the Ordinance to enable the Insurance Authority to perform certain functions for the effective supervision of insurers and to reflect clearly the intention of certain provisions in the Ordinance. The amendments comprise -

Firstly, clarifying section 5(1)(b) of the Ordinance, which requires the Authority to enter in the register of authorised insurers authorisation conditions relating to restrictions only on the classes of business. Although it was never the intention that precautionary authorisation conditions such as conditions on premium limit be included in the register, the wording of the section is such that any authorisation conditions would have to be included. As inclusion of such conditions may be misinterpreted as signifying that the insurer is in trouble, it is necessary to amend the section to reflect clearly the original intention.

Secondly, enabling the Authority to relax requirements of the Valuation Regulation that is being drafted pursuant to section 59(a) of the Ordinance. This section empowers the Governor in Council to make regulations to determine the value of an insurer's general business assets and liabilities. Under certain circumstances it will prove necessary to modify some requirements of the Regulation, for example, in relation to authorised insurers incorporated outside Hong Kong who are already subject to satisfactory valuation regulations in their home countries. Such modification will however only be approved on a case by case basis and provided that it is not contrary to the interests of policy holders.

Thirdly, limiting to businesses carried on in or from Hong Kong the requirement under section 22(1)(a) for separation of the assets and liabilities attributable to class G or H of long term business, that is retirement schemes business with or without a guarantee. The intention of such separation is to safeguard retirement schemes business carried on in Hong Kong and not elsewhere. However, the section applies inadvertently to overseas insurers, some of whom are not required to separate assets and liabilities attributable to such classes of business in their home countries. The proposed amendment would relieve them of these difficulties.