On June 26, the Independent Insurance Authority (IIA) will become the new insurance regulatory agency for Hong Kong, replacing the Office of the Commissioner of Insurance (OCI). Ahead of the takeover of duties, members of the insurance industry have said that they look forward to working proactively with the IIA, as well as raising some concerns.
The formation of the IIA will bring together insurers and some 80,000 intermediaries, such as brokers and agents, under the fold of a single regulator, which will also function as inspector and investigator. The IIA’s regulatory, investigatory, and enforcement capabilities will also be greatly enhanced compared to its predecessor.
The insurance industry has said that it is actively engaging with the IIA to come up with a “simpler, more flexible and less onerous” regulatory package.
Insurers are also approaching the IIA to learn about its plans on licensing and regulating intermediaries. The industry also seeks clarification on the definition of “regulated activity” under the Insurance Ordinance.
“We are not starting from scratch,” Peter Tam, CEO of the Hong Kong Federation of Insurers, told the
Harbour Times. “We already have the SROs with all sorts of regulations in place. They have been developed and refined over a long period of time with a functioning penalty framework. That’s why we have been proposing to move the existing regulations – with appropriate modifications – to the new regime and use them as the reference point for any new provision.”
Tam added that insurers will closely monitor the collection of a new levy on insurance premiums, which will be shouldered by policyholders and remitted to the IIA beginning January 01, 2018, as well as several new arrangements to collect fees from insurers and users.
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