Hong Kong plans to establish the Insurance Regulatory Authority

Hong Kong plans to establish the Insurance Regulatory Authority Xinhua News Agency The Hong Kong SAR government recently announced the results of the consultation on the establishment of an independent Insurance Regulatory Authority. The consultation shows that the public generally has a negative attitude towards Hong Kong...

>Xinhua News Agency

The Hong Kong SAR government recently announced the results of the consultation on the establishment of an independent Insurance Regulatory Authority. The consultation shows that the public generally supports the establishment of the Insurance Authority in Hong Kong. The SAR government will continue to promote relevant work. After the establishment, the Insurance Authority will have the power to investigate, prosecute and punish.

The SAR government had previously conducted public consultation on the establishment of the Insurance Regulatory Bureau. In the consultation document, the SAR government recommended that the Insurance Regulatory Authority be given clear powers, including conducting investigations, obtaining information, initiating prosecutions and imposing regulatory penalties for misconduct.

Regarding the sale of insurance by banks, the Insurance Authority will work closely with the Hong Kong Monetary Authority, the current main regulator of banks, and when necessary, delegate designated powers to the Hong Kong Monetary Authority so that it can perform its front-line supervisory function.

In terms of financial mechanisms, the SAR government will provide a subsidy of HK$500 million and recommends that the Insurance Authority recover all costs in the sixth year of its establishment.

Secretary for Financial Services and the Treasury Bureau Chan Ka-keung of the SAR Government stated that the Insurance Authority will be operationally and financially independent from the government and the industry in accordance with international regulatory principles, and will facilitate market innovation and maintain the competitiveness of the industry without lowering regulatory standards.

The SAR government plans to complete the draft of the main provisions of the relevant legislation in early 2012.