86 | Financial and Monetary Affairs
At year-end, there were 34 991 insurance intermediaries, including 34 429 agents of whom 2 327 were agency firms and 562 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 to promote its general stability and protect policy holders.
The ICO prescribes a regulatory framework for all classes of insurance business to ensure the financial stability of all insurers authorised in Hong Kong and the fitness and propriety of their management. The IA may take appropriate actions under the ICO against an insurer to safeguard the interests of policyholders.
The ICO also sets out the self-regulatory
self-regulatory framework for insurance intermediaries. The self-regulatory organisations include the Insurance Agents Registration Board under The Hong Kong Federation of Insurers, the Hong Kong Confederation of Insurance Brokers and the Professional Insurance Brokers
Association.
As a member of the International Association of Insurance Supervisors (IAIS), Hong Kong makes its best efforts to ensure that its supervisory regime is in line with. prevailing principles and standards. It has also established an Insurance Advisory Committee to advise the Chief Executive on matters relating to the administration of the ICO and the carrying on of insurance business in Hong Kong.
Recent Developments
In view of the financial crisis, the IA with the support of a robust regulatory framework, has stepped up its monitoring of market movements and their impact on the financial and solvency position of authorised insurers in Hong Kong.
The global financial crisis has called for further strengthening of investor protection. In this regard, the IA and the insurance industry have worked together to enhance the disclosure and suitability assessment of investment-linked assurance scheme (ILAS) products so as to ensure that consumers purchase products that are suitable for them and consistent with their needs and risk appetite. These measures include an improved version of the Financial Needs Analysis, a Risk Profile Questionnaire, and a declaration by the insured that he fully understands the product features. Insurers are also required to make phone calls to vulnerable clients (i.e. clients who are (i) aged over 65; (ii) with education at primary level or below; or (iii) with no regular source of income) to confirm suitability assessment. To upgrade the professional knowledge of insurance intermediaries selling ILAS products, the IA enhanced the examination syllabus for the Investment-Linked Long Term Insurance Examination paper under the Insurance Intermediaries Qualifying Examination. It was
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