By KAREN CHIU
Local policyholders are expected to receive better protection from next year when the government sets up an insurance authority that has the rights to fine firms and revoke their licenses.
The Insurance Companies (Amendment) Bill 2014, for setting up an independent watchdog and a statutory licensing regime for intermediaries, will be gazetted next Friday, officials said yesterday.
It expects to pass into law by 2015.
"The Bill marks a key step forward for setting up an insurance regulator which is independent of the industry and the administration, in line with international practice," said Ceajar Chan Ka-keung, Secretary for Financial Services and the Treasury.
That means the sector will have one statutory body to impose disciplinary sanctions on insurers, instead of the subdivided power by the current three self-regulatory organizations that have different violation standards.
"Companies and individuals could receive a maximum fine of HK$10 million or have their agent licenses permanently revoked under the new regime," said Financial Services and the Treasury (Financial Services) permanent secretary Au Kin- chi, in accordance with the seriousness of violation and other factors like the policyholders' losses.
The new authority will also take up the Office of the Commissioner of Insurance that now monitors policyholders' complaints.
The watchdog will charge fees equal to 1 percent of premiums, limited to HK$100 for life insurance and up to HK$5,000 for other policies. All insurers will have to apply for a new license.
Source The Standard
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