HKFI tables proposals to broaden role
The Hong Kong Federation of Insurers (HKFI) has proposed introducing new provisions to its articles of association which would allow it to suspend, censure and fine its members.
The proposed move is in an attempt to further strengthen the regulatory role of the HKFI and has been designed to provide a short-term solution ahead of wider regulatory powers being granted to the federation.
The HKFI represents more than 220 insurers in the SAR.
According to the federation's latest issue of Monthly Brief, the association's special task force recommended several ways to strengthen the role of the HKFI.
The task force was established in July to seek ways to boost the body's regulatory role in overseeing insurance companies.
Its main suggestion was setting an independent body to handle complaints against members and introduce compulsory membership for all insurers operating in the SAR.
After four months of consultation, the task force rejected compulsory membership after its legal advisers said there was no legal backing for the insurance industry for such a requirement.
The special task force decided setting up an independent body to handle complaints and disputes was a good idea although it would take between five and 10 years to complete.
Since it would take so long to set up the independent body, the special task force said the HKFI should take short-term action to strengthen its regulatory role prior to the establishment of the independent body.
The new provisions in the articles of association form part of these short-term measures.
They include allowing the association to take a range of action against insurance companies including fines, censorship, suspension of membership and in severe cases expulsion.
Any action taken must receive the sanction of a majority of the federation's members.
It suggested the HKFI assume the role of mediator in resolving disputes among insurance companies.
In case a company fails to comply with an HKFI initiative, the association should request the Commissioner of Insurance to exercise his influence.
The HKFI is consulting to its members about the recommendations.