XN000022-1997-01-15 — Page 32

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The ICO provides that transfer of general business may be effected with the approval of the Commissioner of Insurance. As for the transfer of long term business, due to the long term nature of the policies, the sanction of the High Court is required, and the Commissioner of Insurance has the right to be heard. Regarding corporate mergers, if they involve the transfer of insurance business, the above provisions will apply.

The Commissioner of Insurance or the High Court will approve or sanction the transfer only if they are satisfied that the transferee is or will be authorised to carry on the relevant business in Hong Kong and that other conditions stipulated in the ICO for the protection of policy holders have been fulfilled. These conditions, inter alia, require the transferor to publicise the scheme of transfer in the newspapers and to notify the affected policy holders in writing.

The affected policy holders are given an opportunity to make representations which must be properly considered by the The most Commissioner of Insurance or the High Court. important consideration is whether a policy holder would be adversely affected by the transfer.

A policy holder who feels aggrieved by the decision may apply for leave for judicial review in the case of a decision by the Commissioner of Insurance, or appeal to a higher court against the decision of the High Court in the case of a court sanction.

A policy holder can also choose to terminate the policy and obtain, in the case of a general business policy, refund of the unexpired portion of premium, or in the case of a long term business policy, payment of the "surrender value" of the policy. The "surrender value" of a policy is determined on an actuarial basis in accordance with the terms of the policy.