Insurance authority scheme pushed
The government will open consultation this year on the long-awaited proposal to set up an independent insurance authority - an idea first mooted 16 years ago.
Commissioner of Insurance Annie Choi Suk-han said a consultant was working on the details of the plan and a consultation paper would be released in the first half of the year.
'It is an international trend for insurance regulators to work outside the structure of the government and we would like to match this,' she said.
Chan Kin-por, legislator for the insurance sector, supported the proposal but warned the new regulator should not impose too many costs on the industry, or over-regulate insurers.
Under the present system, the Commission of Insurance regulates the industry following the civil service structure.
Choi said the office will also launch a consultation in the third quarter of the year on the launch of an insurance policyholders protection fund.
The commissioner has proposed setting up a compensation fund from a levy on premiums that will compensate insurance policyholders up to HK$1 million if an insurance company collapses.
The scheme was first raised in 2003 but failed to proceed. The troubles of US insurer AIG in 2008 put the issue back in the spotlight.
Choi said the HK$1 million payout would be able to cover about 90 per cent of the 8.7 million insurance policies in the city.