TNAG-1772-FCO40-25242-Business-and-financial-legislation-in-Hong-Kong.-Part-2-of-2-1988 — Page 158

6

Transitional.

7.

INSURANCE COMPANIES (AMENDMENT) BILL 1988

(2) The Insurance Authority shall not give an appro referred to in subsection (1)(b) except where in his opinion it is desirable or expedient that the examination concerned should be carried out in the interests of existing or potential policy holders or in the public interest.

(3) This section shall apply to

(a) associations of underwriters approved under section

6; and

(b) Lloyd's,

as it applies to authorized insurers.".

Section 5(1)(b) of the principal Ordinance as amended by section 2(a) shall apply to an authorized insurer whether authorized before, on or after the commencement of this Ordinance.

Explanatory Memorandum

The purposes of this Bill are-

(a) to delete from section 12 of the principal Ordinance the 5 year period of validity presently applicable to conditions imposed by the Insurance Authority on an authorization of a company under section 8(1)(a) of the principal Ordinance to carry on any class or classes of insurance business;

(b) to amend section 40 of the principal Ordinance to empower the Insurance Authority to direct, in certain circumstances, that an authorized insurer shall cease to be authorized to carry on insur- ance business which is part of a class of insurance business; and (c) to insert into the principal Ordinance a new Part VIIIA to provide that information obtained under the principal Ordinance shall not be disclosed except in certain specified circumstances and, in some cases, to certain specified persons.

2.

Clause 3 repeals and replaces section 12 of the principal Ordin- ance. The new section 12 means that any conditions imposed on an authorization of a company under the principal Ordinance, irrespective of whether such conditions were imposed before, on or after the commence- ment of the Bill, shall have effect until such time as they are revoked by the Insurance Authority. It is considered that the Insurance Authority should decide, in the circumstances of each case, when such conditions should cease to have effect. Clause 2(a) makes a consequential amendment to section 5(1)(b) of the principal Ordinance in respect of the matters to be kept in the register of authorized insurers.

3. Clause 5(a) deletes and replaces section 40(1) and (2) of the principal Ordinance. The new section 40(1) and (2) empowers the Insurance Authority to direct that an authorized insurer shall cease to be authorized to carry on insurance business which is part of a class of insurance business on the same grounds that he can presently give a like direction under section 40 of the principal Ordinance in respect of all insurance business or a class of insurance business. The administration of the principal Ordinance has shown that this further extension of the Insurance Authority's power under