There is one gigantic loophole for all insurance policyholders if the government's plan to establish an independent insurance authority is successful.
The government has brought out a consultation paper on the Insurance Companies (Amendment) Bill. It details the proposed amendments to the current Insurance Companies Ordinance. This new authority will only handle outstanding complaint cases not yet resolved by self-regulatory organisations before its establishment. It will not handle any complaint cases not involving compliance matters (matters which involve compliance with the relevant ordinance and regulations) in the future.
Let's consider two scenarios. If an insurance company violates the amended ordinance, it will be disciplined by the future authority, but despite that the victims of the company's act have to seek redress on their own. What is even worse is when the company does not violate the ordinance but someone feels aggrieved by its treatment of them.
This second scenario is quite common - claims made by holders of medical insurance policies being rejected by their insurance companies.
Cases of this kind are now dealt with by the Insurance Claims Complaints Bureau.
It was set up by insurance firms as a self-regulatory initiative and its complaints panel independently handles complaints arising from insurance claims free of charge.
After the establishment of the insurance authority, however, all the complaint handling regimes set up by self-regulatory organisations will have to be abolished and policyholders will find themselves having to fight on their own in a David and Goliath battle.
For example, families of the victims of the balloon disaster in Egypt can still go to this bureau over any insurance complaints, but it will not exist once the authority is set up.
Rumour has it that the officials in charge of the matter are well aware of the inevitable worsening protection for hundreds of thousands of policyholders, but they have decided that the insurance authority should not take up complaint cases because of all the troublesome complexities involved. They just want to do disciplinary (compliance) cases, which are much smaller in number and much easier and simpler to handle.
Any so-called reform which claims to bring the current regulatory regime in line with international standards, but which will leave ordinary people worse off, is unacceptable.
Hong Kong people deserve better.
Jose Chan, Sai Wan Ho