The government will set up a new fund to compensate injured workers who are left without cover by the collapse of an insurance firm.
The move comes after the Employees Compensation Assistance Scheme ran out of money under the weight of HK$370 million in claims following the collapse of Australian insurer HIH in April last year.
Under the law, companies must buy insurance for their employees to cover workplace injuries. The scheme, funded by a levy on employers, steps in to provide cover if the employer has failed to buy insurance or the insurance company goes under.
Insurance Commissioner Benjamin Tang Kwok-bun told legislators yesterday that a separate fund was needed in light of the HIH collapse.
The sudden claims arising from HIH had increased the financial difficulties of the scheme, which had run out of money in recent years because of a high number of claims.
The Insurance Authority and the Hong Kong Federation of Insurers had worked out details of the new compensation fund, to be called the Employees Compensation Insurers Insolvency Scheme, he said.
Mr Tang said a levy would be collected from all insurers that sold the employees' compensation insurance, but the level of the levy had yet to be determined.