Latest Legislative Developments

Insurance Companies (Amendment) Ordinance 2000

The Insurance Companies (Amendment) Ordinance 2000 ("Amendment Ordinance") [PDF] has been enacted. It was gazetted on 2 June 2000 and came into operation with immediate effect.

The Amendment Ordinance -

• allows the Insurance Authority ("IA") to disclose financial and statistical information of individual insurers and Lloyd's; and
• empowers the IA to accept actuarial standards comparable to the prescribed ones for compliance by appointed actuaries of long term insurers.

Disclosure of Individual Financial and Statistical Information

Under the existing regulatory system, insurers and Lloyd's submit to the IA, among other things, financial and statistical information relating to their Hong Kong general and long term business. However, prior to the enactment of the Amendment Ordinance, the IA is prohibited by the secrecy provisions under section 53A of the Insurance Companies Ordinance (Cap. 41) ("ICO") from disclosing to the public any information of an individual insurer and Lloyd's which he obtains in the course of performing his duties unless certain requirements are met, e.g. with their consents. This is undesirable in terms of market transparency.

For the purpose of enhancing market transparency, the Amendment Ordinance amends the secrecy provisions under section 53A of the ICO to allow the IA to disclose financial and statistical information of individual insurers and Lloyd's when it is considered in the interests of policy holders or the public to do so. The IA and his staff etc. are however prohibited from disclosing any information relating to the affairs of individual policy holder of an insurer except under specified court proceedings.

Acceptance of Actuarial Standards

An insurer carrying on long term business in or from Hong Kong is required under section 15(1) (b) of the ICO to appoint an actuary. In carrying out his duties under the ICO, the appointed actuary is required to comply with any standards prescribed by the IA under section 59(2) (aa) of the ICO. To this end, the IA intends to prescribe, by regulations to be made shortly, the Professional Standard 1 ("PS1") issued by The Actuarial Society of Hong Kong.

There are instances that the appointed actuaries of certain insurers are overseas residents and the professional standards to which they are subject under their respective jurisdictions may be comparable to the PS1. To accord flexibility, the Amendment Ordinance introduces a new section 15C to empower the IA to accept standards which are considered comparable to the prescribed standards for compliance by appointed actuaries. An appointed actuary may therefore comply with either the prescribed standards or other standards acceptable to the IA.

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