ENG-2004 — Page 119

Financial and Monetary Affairs | 89

After consulting the public, new guidelines on disclosure of securities services- related fees and charges by banks and brokers were released in November 2004 and will take effect in January 2005. The guidelines recommend disclosure under six standardised categories. Investors will find it easier to understand what they pay for and compare fees and charges of different intermediaries.

In 2004, the SFC began to see positive results from focusing its enforcement resources on fighting corporate misgovernance, market misconduct and intermediaries who are dishonest or put clients at risk. Listed company investigations have substantially increased in number. In the first prosecution under the dual filing regime in September 2004, the SFC successfully prosecuted a listed company and one of its directors for providing false or misleading information. Successful market manipulation prosecutions and referrals to other law enforcement agencies have also been on the increase. For intermediaries, the SFO enables the SFC to impose proportionate and flexible sanctions against misconduct with a disciplinary fining power. The SFC may also settle its disciplinary actions against licensees in appropriate cases, provided it is in the public interest to do so.

Insurance Sector

Main Features

Hong Kong is one of the most open insurance centres in the world. At year-end, there were 180 authorised insurers, 91 of which were incorporated in Hong Kong while the remaining 89 were incorporated in 22 countries outside Hong Kong, with the United States taking the lead.

Notwithstanding the economic slowdown, the total gross premiums of the insurance industry reached $102 billion in 2003, representing 14.6 per cent growth over 2002. Gross premiums of the general insurance sector increased by 5.6 per cent to $24.8 billion in 2003. General Liability and Property Damage business attained considerable premium growth. Underwriting performance improved from a profit of $1,243 million in 2002 to $1,343 million in 2003.

The long-term insurance business continued to attain double-digit annual growth from 1991 to 2003, with office premiums increasing by 17.9 per cent to $77.2 billion in 2003. The office premiums in force of Individual Life business amounted to $61.8 billion, accounting for 80.0 per cent of the total office premiums. The number of Individual Life policies in force grew by 7.3 per cent to 5.6 million in 2003.

At year-end, there were 31 683 insurance intermediaries, including 31 207 agents (of whom 1 989 were agency firms) and 476 brokers.

Insurance Authority

The Commissioner of Insurance, appointed by the Chief Executive as the Insurance Authority (IA), has the principal function (under the Insurance Companies Ordinance (ICO)) to regulate and supervise the insurance industry for the promotion of the general stability of the insurance industry and for the protection of existing and potential policy holders.