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Fourthly, empowering the Authority to authors an insurer to combine his Hong Kong long term business other than classes G and H with his other overseas long term business including any additional business not defined in the Ordinance. This amendment is necessary as long term business in overseas jurisdictions may be classified differently from the classifications set forth in the Ordinance. An overseas insurer may have difficulty in fully complying with the separation requirement under section 22(1) of the Ordinance and be required to establish a separate fund purely for his Hong Kong business. As such business may be much smaller, he would not be able to take advantage of broader, risk limiting, investment opportunities, which in turn would not be in the best interests of Hong Kong policy holders.
Fifthly, a proposal to give retrospective effect to the Regulation made by the Governor in Council in July 1994 to exclude trustee operated retirement schemes, which were unintentionally brought within the ambit of the Insurance Companies (Amendment) Ordinance 1993, which introduced classes G and H retirement schemes business. To avoid rendering retirement schemes operated by trustees illegal during the period between commencement of the Amendment Ordinance and the making of the Regulation, the Regulation shall, I propose, be deemed to take effect from commencement of the Amendment Ordinance.
Lastly, a proposal to exempt immediate annuity contracts which provide benefits to retirement scheme beneficiaries from the prohibition to combine a class G or H retirement scheme business with any other long term business and to give retrospective effect to the exemption from the date of commencement of the prohibition. This would prevent such contracts from being rendered illegal between that date and the enactment of this Bill.
Mr President, I commend the Insurance Companies (Amendment) Bill 1995 to this Council.
Mr President, as I said at the outset these proposals are put forward to promote efficiency in the Insurance Authority's administration of the insurance industry and to enhance protection of policy holders' interest. As such I commend them to members.
End/Wednesday, February 15, 1995
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