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planned that with effect from March 2010, all new insurance intermediaries wishing to sell ILAS would have to pass the revised examination paper. In addition, consumer education on ILAS products has been stepped up.

As a member of the IAIS, the IA contributes to the development of international standards in insurance supervision. The IAIS has been analysing the financial crisis and its impact on the global insurance in order to identify areas for reform, with particular emphasis on enhancing group and cross sectoral supervision. The IA will keep in view any new standards promulgated by the IAIS and consider adopting them in Hong Kong, taking into account local circumstances.

In addition, the IA will continue to participate in supervisory colleges so as to work closely with overseas regulators on regulating major insurance groups.

Mandatory Provident Fund Schemes and Occupational Retirement Schemes

Main Features

On December 1, 2000, the MPF System was implemented to help encourage the workforce to save and invest for their retirement. It is a privately managed, employment-related mandatory system of provident fund schemes. Unless exempted, employees and self-employed people aged between 18 and 65 are required to join MPF schemes.

The employer and employee are each required to contribute five per cent of the employee's relevant income to a registered MPF scheme, subject to the maximum and minimum levels of income for contribution purposes. The accrued benefits are fully vested in the scheme members and can be transferred when employees change employment or cease to be employed. A self-employed person has to contribute five per cent of his or her relevant income. In normal circumstances, benefits must be preserved until the scheme member attains the retirement age of 65. By end 2009, 99.9 per cent of employers (about 238 000), 99.9 per cent of relevant employees (2 209 000) and 75.5 per cent of self-employed persons (263 000) had participated in MPF schemes. Total MPF assets amounted to about $309 billion.

Unlike the compulsory MPF schemes, occupational retirement schemes registered under the Occupational Retirement Schemes Ordinance (ORSO) are voluntary schemes established by employers. To tie in with the implementation of the MPF system in 2000, schemes registered under the ORSO that fulfilled certain conditions were exempted from MPF requirements. Members of such schemes may choose to remain in the existing scheme or join an MPF scheme. At year-end, there were 4 440 MPF-exempted occupational retirement schemes covering over 400 000 employees.

Mandatory Provident Fund Schemes Authority (MPFA)

Established in September 1998 under the Mandatory Provident Fund Schemes Ordinance (MPFSO), the MPFA is responsible for regulating and supervising the MPF

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