In our 14 January 2016 bulletin, we reported1 that the appointments to the Independent Insurance Authority in Hong Kong (IIA) had been announced.
The IIA held its first meeting on 29 January 20162. Dr Moses Cheng, the newly appointed IIA Chairman, highlighted that the priority of the IIA is to prepare for the smooth transition from the existing regulatory regime to the new regime. He confirmed that the process would be implemented in phases. The government’s target is for the IIA to take over the regulation of insurance from the Office of the Commissioner of Insurance (OCI) by the end of 2016 and to commence the supervision of insurance intermediaries in the next two to three years. In doing so it will replace the three self-regulatory organisations (namely Hong Kong Federation of Insurers, Hong Kong Confederation of Insurance Brokers and Professional Insurance Brokers Associations). The Chairman explained that the IIA would build on the work of the Working Group on Transition to IIA, which was set up by the Financial Services and the Treasury Bureau and OCI, and continue to work with the insurance industry during the transition.
According to the press release the following issues were specifically discussed:
- The IIA’s corporate plan for 2016-2017.
- The organisation structure and recruitment of staff for the IIA’s executive arm. In this regard, an earlier recommendation by a consultancy commissioned by the Government to recruit 299 staff was noted. This is a slightly higher number than previously indicated (240-250) which probably reflects the amount of work that the IIA is likely to take on.
- The establishment of three committees:
- Corporate Services Committee – to oversee and advise the IIA on recruitment, office accommodation and accounting issues.
- External Relations Committee – to advise on matters related to the publicity programme and stakeholder engagement strategies.
- Audit Committee – to advise on matters relating to auditing.
The IIA also plans to form an Investment Committee to advise on the investment strategy for the IIA’s funds. One of the new functions of the IIA, which was included following consultation, is to “formulate effective regulatory strategies and facilitate the sustainable market development of the insurance industry, and promote the competitiveness of the insurance industry in the global insurance market”. It will be very interesting to see how IIA will carry out this function, especially in view of the successful strategies adopted by the Singapore authorities.
- The Government’s proposal regarding appointments to the two industry advisory committees on long-term business and general business. The committees will be appointed by the Financial Secretary and comprise practitioners from different lines of insurance business and experts from related fields such as consumer protection, compliance and accountancy. They will advise the IIA on industry-related issues.