Insurance authority plan opposed by 95pc of HK agents

PUBLISHED : Saturday, 25 September, 2010, 12:00am
UPDATED : Saturday, 25 September, 2010, 12:00am

Nearly all life insurance agents in Hong Kong oppose government plans to set up an independent insurance authority, a survey shows.

More than 95 per cent of the 1,371 members of the General Agents and Managers Association of Hong Kong and the Life Underwriters Association of Hong Kong questioned about the plans, as part of a three-month consultation, are against the idea.

'It's because a majority of the insurance agents believe the existing self-regulating system is effective and fair,' Jeff Wong Kwan-kit, chairman of LUAHK's industry affairs steering committee, said.

'We're worried the proposed authority will be run by non-industry members and a lot of changes will be made to the current system that we deem effective. We also believe the new charge will increase the burden on agents and policyholders.'

The proposed authority, which will regulate insurance companies and agents, would be set up in 2012 with 237 staff and have an annual budget of HK$240 million; funding would come from licence fees paid by insurers and salespersons together with a 0.1 per cent levy on insurance premiums paid by policyholders.

Both associations, plus the Hong Kong General Insurance Agents Association and Hong Kong Chamber of Insurance Intermediaries said that the consultation paper 'fails to safeguard the long-term interest of the public and the industry'.

They also said it was wrong to set up an independent body while, at the same time, allowing the Hong Kong Monetary Authority to continue to regulate bank staff that sold policies. They said it would create confusion and two sets of monitoring systems.

A spokesman for the Financial Services and the Treasury Bureau said that the proposal for a financially and operationally independent authority, which would exercise direct regulation over intermediaries, was in line with international practice.

'[It] aims to enhance the insurance regulatory regime to better protect insurance policyholders. We will continue to engage the industry and other segments of the community in taking forward the exercise,' he said.

The consultation period ends on October 11.