The Insurance Companies (Amendment) Bill 2014 (Bill) was passed by the Hong Kong Legislative Council on 10 July 2015. The Bill amends the Insurance Companies Ordinance, and renames it the Insurance Ordinance. The Insurance Ordinance will launch in three stages, over two to three years, to allow for a transition from regulation by the Commissioner of Insurance (OCI) and the existing self-regulatory regime for insurance intermediaries to regulation by the independent Insurance Authority.
As stage 1, the government plans to form the Provisional Insurance Authority (PIA) by the end of this year. The PIA will hire staff and lease offices etc. In stage 2, which is likely to take place in 2016, the PIA will be renamed Insurance Authority and will take up the existing duties of the OCI such as the prudential and conduct regulation of insurers and enforcing the anti-money laundering regulatory regime. During stage 2, the self-regulation of insurance intermediaries will continue but preparations will be carried out for stage 3 in which the independent Insurance Authority will take over these functions. Stage 3 is a major shift - a statutory licensing regime for insurance intermediaries will replace the existing self-regulatory regime (administered by the Insurance Agents Registration Board, the Confederation of Insurance Brokers and the Professional Insurance Brokers Association).
We have previously written about the Bill1 and the most recent amendments thereto (all of which were adopted)2.