The regulatory system for insurance in Hong Kong has undergone a significant transformation with the launch of a new independent body.
The Insurance Authority (IA) has officially replaced the Office of the Commissioner of Insurance (OCI), with the OCI disbanded.
The new, independent regulatory body will be tasked with supervising and promoting the general stability of the industry while protecting policyholders.
The IA was originally established in 2015 and has been preparing for the takeover of regulatory functions in phases. Within the next two years, the IA will take over the direct regulation of insurance intermediaries from the three self-regulatory organisations through a statutory licensing regime.
Dr Moses Cheng, chairman of the IA, said that the new organisation has received the support of the industry as well as the OCI throughout its transition.
“The IA strives to facilitate the sustainable development of the insurance industry and to better protect policyholders with a more holistic and effective regulatory system,” Dr Cheng said. “Various initiatives, including the development of a risk-based capital regime and the introduction of a policyholders’ protection scheme, are in the pipeline.”
Dr Cheng noted that, to tie in with the launch of the statutory licensing regime for insurance intermediaries, the IA will also set out conduct requirements and professional standards for practitioners by issuing codes and guidelines.
The IA will start with approximately 180 staff, with numbers rising to around 300 when intermediary regulation is added to the fold.
In its initial years, the IA will be funded by the Government but the regulator will be financially independent and recover its own costs.
The IA introduced the Insurance Ordinance, an annual authorisation fee from insurance companies, and user fees from June 26 with separate subsidiary legislation for the collection of a levy on premiums from policyholders effective from January 01.
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