With the 20th anniversary of the Securities and Futures Commission this month, it is time the government made good on its promise to let the Insurance Authority follow in the SFC's footsteps. Back in the 1980s, the regulation of banks, insurance companies and securities firms was all done by the government. The 1987 market crash led the government to call for reforms, inviting British accountant Ian Davison to draw up a regulatory blueprint. The most important among Mr Davison's 244 recommendations was to end the era of having civil servants with no market experience regulate the securities market. In May 1989, Hong Kong set up the SFC, which collects levies from the markets to fund its operations and pays private sector salaries to hire professionals to regulate the market. In 1993, the Hong Kong Monetary Authority was set up to act as a de facto central bank to regulate banks. The Mandatory Provident Fund Schemes Authority, which regulates the pension industry, was formed in 1999, also in line with the SFC model. This left insurance as the only financial sector still regulated by government officials, even though Mr Davison had suggested putting insurers under the SFC's scope. The government has not completely forgotten Mr Davison's suggestion. In fact, Michael Cartland, the former secretary for monetary affairs, said in 1993 that the government would study spinning off the Insurance Authority to be run like the SFC. The problem is that after 16 years, there is still no independent Insurance Authority. The government may not feel the urgency to carry out the reform, as there have been no major crises in the sector. Also, some insurers have expressed fear a non-government funded Insurance Authority would mean a sharp rise in licence fees and tighter regulations. But the government should put public interest above industry concerns. Anglo Starlite Insurance's collapse earlier this month was a warning to the government to overhaul the regulatory structure. Industry sources said Anglo Starlite, which offered insurance for taxis and minibuses, had been one of the most aggressive players in its sector, competing for business through low prices. This raised questions about whether there should be regulations to stop price wars, or if there should be an increase in financial requirements for insurers. An insurer's minimum capital requirement is HK$10 million. Insurers need to have a solvency margin showing they have an excess of assets over liabilities. Industry players say these requirements, set more than 10 years ago, lagged international standards. Why doesn't the Insurance Authority regulate insurance agents, who are now self-regulated by the Insurance Agents Registration Board set up by the Federation of Insurers? The insurance sector has no compensation safety net to protect policyholders against insurer collapses. Banks, pension funds and brokers have such arrangements in place. It has been 16 years since the government first talked about an insurance regulation overhaul. We want action, not just talk. Pension expert For this week's video programme, our guest is Alan Merten, the vice-president of employee benefits at Manulife (International). He is one of Manulife Hong Kong's senior managers responsible for pensions, group life and group medical products. Mr Merten urges employees to invest their MPF funds with a long-term view.