The basic plan is to set up an independent insurance authority (IIA), with financial and operational autonomy. The government is now consulting relevant stakeholders for their views on a detailed framework of proposals.
In essence, the aim is to tighten regulation of insurance companies, implement international standards, and provide better protection for policyholders. The new authority will supersede the Office of the Commissioner of Insurance, which is now the only local financial services regulator operating as part of government machinery.
Other expected changes will see the planned IIA responsible for the licensing and supervision of insurance intermediaries, the frontline sales agents. This will replace the current system, in place since 1995, which depends on three self-regulatory bodies - the Professional Insurance Brokers Association, the Insurance Agents Registration Board and the Hong Kong Confederation of Insurance Brokers - overseeing these activities. In future, these three bodies will continue as trade associations, no longer having a direct role in the licensing, conduct, inspection or disciplining of agents.
According to the latest timetable, the government intends to make available draft legislation provisions in early 2012. A period for further discussion and feedback will follow but, on the whole, insurance industry leaders in Hong Kong seem to be behind the imminent changes and confident things are on the right track.
"We are supportive of the government's proposal to reinforce market regulations," says Stuart Harrison, CEO of AXA Hong Kong. "This will help strengthen customer confidence and the professionalism of the industry. We are ready to work closely with the authority and other key stakeholders during the development of the legislation."
A priority, Harrison notes, must be to align local codes and standards with international practice. This is fundamental in bolstering Hong Kong's regional role and standing in the sector. It is also essential to design measures that give better protection to policyholders and allow a level playing field for all insurance intermediaries.
"In drafting any new