Letters to the Editor, April 2, 2013

The description in Jose Chan's letter ("Policyholders worse off with proposed insurance authority", March 28) distorts our proposals. One of the purposes of establishing the new authority is to enhance protection of policyholders.

Mr Chan alleged that "the independent insurance authority will only handle outstanding complaint cases not yet resolved by self-regulatory organisations before its establishment." This is an allegation made totally out of context.

At present, insurance intermediaries are supervised by three separate self-regulatory organisations (SROs). The SROs handle complaints against misconduct of insurance intermediaries. One of our proposals is to replace the existing self-regulatory regime by a statutory licensing regime for insurance intermediaries to enhance protection of policyholders.

To ensure that policyholders' right of seeking redress will not be disrupted during the transition from the current regime to the new regime, we propose to specify a range of transitional arrangements in the statute. One of these arrangements is that upon the inception of the new authority, it will handle outstanding complaint cases not yet completed by the SROs. There are similar transitional arrangements overseas.

Also, the Insurance Claims Complaints Bureau is set up by the insurance industry to handle complaints against insurance companies about insurance claims. It is an adjudicating panel and does not have any regulatory functions. We have not proposed abolishing the bureau as Mr Chan alleged. In fact, the government has been discussing with the insurance industry how to enhance the dispute settlement mechanism in the light of the recently-established Financial Disputes Resolution Centre.