Key Development in the Hong Kong Insurance market. David Alexander Governing Committee Member

Transcription

1 Key Development in the Hong Kong Insurance market David Alexander Governing Committee Member

2 Agenda HKFI Corporate Structure Proposed Voluntary Health Insurance Scheme (VHIS) Independence of Insurance Authority (IIA) Proposed Policyholders Protection Fund (PPF) Risk Based Capital Framework (RBC) Par & UL Regulations ILAS Regulations Market Overview Educational Initiatives/Activities

3 Corporate Structure

4 Task Forces and Working Groups General Insurance Council Accident Insurance Association Fire Insurance Association Legal Working Group Marine Insurance Association Medical Insurance Association Reinsurers Forum Task Force on Captive Insurance Task Force on Consultancy Study on Risk-based Capital Framework Task Force on Employees Compensation Task Force on Employees Compensation Terrorism Governing Committee Insurers-Brokers Liaison Committee Task Force on Competition Law Task Force on Consultancy Study on Risk-based Capital Framework Task Force on Financial Technology Hub Task Force on Greater China Affairs Task Force on Health Care Reform Task Force on Policyholders Protection Fund Task Force on Prevention of Insurance Fraud & Claims Database Task Force on Review of the Personal Data (Privacy) Ordinance Task Force on the IFRS4 Task Force on the Independence of the Insurance Authority Task Force on Young Insurance Executive Development Programme Life Insurance Council Actuarial Working Group ILAS Products Working Group Legal Working Group Life Operation and Risk Management Working Group Professional Standards Working Group Retirement Schemes Working Group Task Force on Automatic Exchange of Financial Account Information Task Force on Consultancy Study on Risk-based Capital Framework Task Force on Non Linked Business Task Force on Sales Remuneration

5 Proposed Voluntary Health Insurance Scheme (VHIS) HKFI expressed grave concerns over the viability and sustainability of the proposed scheme Food and Health Bureau adjusted the specifications of the scheme. More details will be disclosed in due course. HKFI Stance: Industry is willing to improve transparency of its products and pricing. The same should also apply to the private hospitals and doctors. We welcome tax incentive for policyholders but this should apply to all, i.e. existing customers and VHIS policyholders.

6 Independence of Insurance Authority (IIA) Bill passed and enacted on 10 July Establishment timetable: By end of 2015 Establishes the Provisional representation on the IA IIA (PIA) Board 1 year Industry after Advisory PIA sets Committees Takes over prudential up conduct requirements regulation (including of the current principle of agents acting in the Insurance best interests Authority of (IA) policyholders) 2-3 years after PIA Takes over conduct pecuniary penalties and appellate mechanism sets up regulation of the 3 Selfregulatory role of the CEO as Responsible Officer Organisations

7 Proposed Policyholders Protection Fund (PPF) Outstanding issues for IA and the Financial Services and the Treasury Bureau (FSTB) to address: the proposed 1% levy cap for the life scheme and the continuity of cover for the general scheme. HKFI supports the proposed PPF in principle but it should be rolled out on a sound basis to avoid creating inadvertently any potential systematic risks for the industry. We will continue our constructive dialogue with the IA and the FSTB with the aim of finding a sensible and professionally sound solution.

8 Risk Based Capital Framework HKFI Stance: Support, in principle. The requirement should be consistent with but not more stringent than comparable supervisory regimes in other countries. OCI should seek to gain "equivalence and grant equivalence to other similar regimes. Need more details on the process and governance. The process of Quantitative Impact Study ( QIS ) and the decision taking mechanism needs a clearer description Mechanism to check that there is consistency across different aspect of insurance businesses. Complex matter with serious implications. be

9 Par & UL Regulations Since Oct 2014, Life Insurance Council (LIC) had been engaged by OCI in preparation for the first draft of GN16 and ongoing discussion with OCI On 30 Jul 2015, OCI released Guidance Note On Underwriting Long Term Insurance Business (Other Than Class C Business) (GN16) to be effective in the beginning of On 18 Sep 2015, OCI issued Guide on Calculation Methodology and Disclosure Format - Fulfillment Ratios & Historical Crediting Interest Rates. On 13 Oct 2015, LIC issued the Benefit Illustrations (BIs) for Par and UL (Non-Linked) Policies to member insurers for implementation in line with GN16.

10 ILAS Updates LIC has recently commissioned a consultancy firm to undertake a rational and objective assessment of the impact of GN15 and other recent associated guidelines / directives on ILAS business across the industry. The intention is to understand the influence of the revised operating requirements around the customer journey, both on a quantitative and qualitative basis, and the subsequent impact on business flows between Class C and Class A products. LIC's intention is to share an overview of the report with the industry, including regulators, SROs and industry bodies, in due course.

11 Market Overview 158 authorized insurers (as of 30 Jun 2015): 95 pure general 44 pure long-term 19 composite Total work force: about 100,000 practitioners, including: Close to 70,000 insurance agents >9,000 engaged in brokerage In 2014, total gross premiums: US$43.5 billion (HK$339.3 billion)

12 Market Overview 2014 (Audited Statistics) General Insurance Gross Premium Net Premium +4.4% +4.5% HK$43.6 billion HK$30.2 billion (US$5.6 billion) (US$3.9 billion) Total In-force Revenue Premium +14.7% Life Insurance New Office Premiums +22.8% Profit HK$3 billion (US$385 million) HK$295.7 billion (US$37.9 billion) HK$109 billion (US$14 billion) Source: The Office of the Commissioner of Insurance (OCI) (US$1 = HK$7.8)

13 Seeing the industry s pressing need for talents, HKFI has launched the YIE Programme, providing college graduates with a combination of job placement in the back office of participating companies and insurance training. YIE 4-day Job Placement 1-day Insurance Training Underwriting Claims Other Dept / Position Completion of 8 modules CII + ANZIIF

14 Publicity Campaign for the Insurance Industry To attract more potential youngsters to join the industry, HKFI launched a publicity campaign to educate the public on the various career opportunities the industry is offering.

15 Invited popular illustrator Cuson Lo to create comics strips on insurance career professions A customized section in Next Magazine mobile site on insurance know-how NEXT MEDIA

16 ROADSHOW Engage cross-media platforms including mini-site, bus TV, videos on YouTube and out-door event to reach out to different segments of consumers CSR event Mini-site and contest Videos created by popular Vlogger

17 FACEBOOK FANPAGE The Facebook fan page 'HKFI Smart Union'( 保聯同學會 )was launched to strengthen engagement with the public as well as industry practitioners To provide interesting news and practical tips relating to the HKFI and the industry by way of short articles, videos, comic strips, interactive games, etc.

18 To recognise the pinnacle of achievement and honor the outstanding accomplishment of insurance industry Top three Finalists were selected and Winners of the 13 categories were revealed in the prize presentation ceremony cum gala dinner held on 29 Oct 2015