ENG-2010 — Page 129

Financial and Monetary Affairs ❘ 87

complaints in relation to distribution of other unlisted structured products under the enhanced complaint procedures?.

In 2010, the SFC ran extensive investor education campaigns in co-ordination with the development of new products in the market, such as RMB funds and bonds, and synthetic ETFs. The SFC also launched a year-long campaign to give details of the package of investor protection measures surrounding the sale of investment products. While explaining the regulatory measures, the SFC also aims to promulgate a responsible approach to investment decisions.

Insurance Sector

Main Features

At year's end, there were 168 authorised insurers, 88 of which were incorporated in Hong Kong while the remaining 80 were incorporated in the Mainland and in 20 overseas countries, with Bermuda taking the lead.

During the past five years, the Hong Kong insurance industry achieved an average annual growth of 8.6 per cent. In 2009, similar to other jurisdictions in the aftermath of the global financial crisis, total gross premiums of the Hong Kong insurance industry decreased by 2.1 per cent to HK$185 billion, while a major rebound has been recorded at $207* billion for 2010.

General insurance business recorded an increase of gross premiums by 9.8 per cent from $28.6 billion in 2009 to $31.4* billion in 2010. The business growth was largely led by accident and health business (comprising medical business). On the other hand, the overall underwriting performance of general insurance business showed an increase in profit from $2.2 billion in 2009 to $2.6* billion in 2010, mainly attributable to premium growth and favourable claims experience. Total revenue premiums of long term in-force business rose by 11.9 per cent to $175.8* billion in 2010. Individual life remained the dominant line of business, taking up $150.5 billion or 85.6* per cent of the total business and the corresponding number of policies stood at 9.1* million.

At the end of December 2010, there were 67 189 individual insurance intermediaries, including 7 722 Chief Executives or Technical Representatives of 582 broker firms, 26 267 Responsible Officers or Technical Representatives of 2 381 agency firms, and 33 200 individual agents.

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The collapse of Lehman Brothers in September 2008 triggered complaints about sales of structured investment products by financial intermediaries to retail investors. To resolve the complaints efficiently and effectively, the SFC adopted a 'top-down' approach, examining, among other aspects, systemic problems with product marketing, including the selling practices and internal controls of intermediaries. In July 2009, the HKMA and SFC reached an agreement with 16 distributing banks to repurchase from about 25 000 eligible clients the Lehman Brothers Minibonds at 60 per cent or 70 per cent of their original investment value, with the higher percentage going to those aged 65 and above.

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Provisional Statistics