Chairman’s Message On 23 September 2019, we marked the end of an era; but more importantly, that date signified the beginning of a new one. For me, there is bit of nostalgia as I walk down memory lane and think of CIB’s service as an SRO for a little over 25 years. CIB embarked on its regulatory BULLETIN NOV ISSUE 2019 1 role from very humble beginnings with 38 founding members around a small table in the office of PwC. We began with simple routine functions as an SRO, but the amount of work, and its complexity, increased, so we moved to our own premises, recruited more qualified people and sought help from various professional organisations and service providers. We actively promoted professionalism by continually raising the bar and setting new standards for ourselves. We established an impartial complaints handling and disciplinary system, which consisted mainly of independent members, including CIB’s Chairmen. We stayed in touch with In a letter to the CIB Chairman relating to the transition, dated 20 September 2019, Mr Stephen Po, Executive Director of the Market Conduct Division at the IA, said the following: “We want to take this opportunity to thank CIB for its full engagement during the transition process of the change in regulation for insurance brokers, which will occur on 23 September 2019. For the IA, being able to engage with a representative body that speaks with a single voice on behalf of a large section of the insurance broking community – and one which is willing to share its wisdom and experience so openly – has been incredibly valuable. We look forward to continuing to engage with you, and to benefiting from that wisdom and experience going forward, as CIB, like the IA, enters this new era.” Recognition of CIB the latest developments in the world of the intermediary sector and followed global trends by participating in the World Federation of Insurance Intermediaries’ World Council Meetings. So; the end of an era. Yes, but only in some respects. Although a few of our activities are going to cease, we will continue to work in close cooperation with the IA to provide the insurance industry with a new breed of highly professional insurance brokers. As such, we will be helping Hong Kong to become a major hub for insurance, reinsurance, risk management and captives. We will be there to support and supplement the IA, and to act as a bridge between our member brokers and the IA. Today and the future are about the IA and the industry. I congratulate Moses, and every member of his very able team, on assuming the responsibility of being the Insurance Regulators of the HKSAR, and I wish them every success. Yours sincerely, B.S. Rath Chairman | November 2019 The End of an Era Fostering the Development of Hong Kong’s Insurance Industry In Hong Kong, insurance is one of the core pillars of the local financial market. And within our industry insurance brokers are crucial, making an important contribution to our city’s economy. CIB is inextricably linked to brokers in Hong Kong, and we play a vital role in ensuring the health of the insurance and financial services industry in general. Not only has CIB long provided specialist and independent advice to commerce and industry, we have also spoken with families and, in doing so, have contributed to their financial security. Furthermore, in our capacity over the years we have set professional standards of conduct for more than 800 insurance broker companies. We will continue to be the bridge between brokers and the regulator. We have a mandate for this from our years of serving our members, and our expertise in all matters is recognised universally. Currently, in terms of market share*, life insurance in Hong Kong has 64%, insurance linked investment has 9% and general insurance represents 27%. By working together – CIB, our members and the regulator – we believe we can continue to build Hong Kong into a viable insurance hub for the Greater Bay Area and for China, which will benefit all in the future. * Insurance Authority Broker Survey 2018
Transcript
Chairman’s MessageOn 23 September 2019, we marked the end of an era; but more importantly, that date signifi ed the beginning of a new one. For me, there is bit of nostalgia as I walk down memory lane and think of CIB’s service as an SRO for a little over 25 years. CIB embarked on its regulatory
BULLETIN NOV ISSUE 2019
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role from very humble beginnings with 38 founding members around a small table in the offi ce of PwC. We began with simple routine functions as an SRO, but the amount of work, and its complexity, increased, so we moved to our own premises, recruited more qualifi ed people and sought help from various professional organisations and service providers.
We actively promoted professionalism by continually raising the bar and setting new standards for ourselves. We established an impartial complaints handling and disciplinary system, which consisted mainly of independent members, including CIB’s Chairmen. We stayed in touch with
In a letter to the CIB Chairman relating to the transition, dated 20 September 2019, Mr Stephen Po, Executive Director of the Market Conduct Division at the IA, said the following:
“We want to take this opportunity to thank CIB for its full engagement during the transition process of the change in regulation for insurance brokers, which will occur on 23 September 2019. For the IA, being able to engage with a representative body that speaks with a single voice on behalf of a large section of the insurance broking community – and one which is willing to share its wisdom and experience so openly – has been incredibly valuable. We look forward to continuing to engage with you, and to benefi ting from that wisdom and experience going forward, as CIB, like the IA, enters this new era.”
Recognition of CIB
the latest developments in the world of the intermediary sector and followed global trends by participating in the World Federation of Insurance Intermediaries’ World Council Meetings.
So; the end of an era. Yes, but only in some respects. Although a few of our activities are going to cease, we will continue to work in close cooperation with the IA to provide the insurance industry with a new breed of highly professional insurance brokers. As such, we will be helping Hong Kong to become a major hub for insurance, reinsurance, risk management and captives. We will be there to support and supplement the IA, and to act as a bridge between our member brokers and the IA.
Today and the future are about the IA and the industry. I congratulate Moses, and every member of his very able team, on assuming the responsibility of being the Insurance Regulators of the HKSAR, and I wish them every success.
Yours sincerely,
B.S. RathChairman | November 2019
The End of an EraFostering the Development of Hong Kong’s Insurance IndustryIn Hong Kong, insurance is one of the core pillars of the local fi nancial market. And within our industry insurance brokers are crucial, making an important contribution to our city’s economy. CIB is inextricably linked to brokers in Hong Kong, and we play a vital role in ensuring the health of the insurance and fi nancial services industry in general. Not only has CIB long provided specialist and independent advice to commerce and industry, we have also spoken with families and, in doing so, have contributed to their fi nancial security. Furthermore, in our capacity over the years we have set professional standards of conduct for more than 800 insurance broker companies.
We will continue to be the bridge between brokers and the regulator. We have a mandate for this from our years of serving our members, and our expertise in all matters is recognised universally. Currently, in terms of market share*, life insurance in Hong Kong has 64%, insurance linked investment has 9% and general insurance represents 27%. By working together – CIB, our members and the regulator – we believe we can continue to build Hong Kong into a viable insurance hub for the Greater Bay Area and for China, which will benefi t all in the future.
* Insurance Authority Broker Survey 2018
At CIB, we are committed to providing opportunities for professional education. For the fi rst quarter of 2020, members can look forward to the following courses:
• Tuesday, 14 January 2020Drones Insurance
• Thursday, 16 January 2020 Fraud Management
• Friday, 17 January 2020 Advanced Liability Insurance and Claims Management
Professional Education: FIS Seminars
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Recently, we set up a Facebook page for CIB members: www.facebook.com/CIB. The purpose is to create an extra channel of communication, which helps members keep abreast of the latest updates. As the page is private, it will be a platform for sharing professional knowledge, as well as discussing compliance and operational issues.
As well as providing an extra layer of connectivity between CIB and members through our new Facebook page, we are also exploring other media platforms. As usual, your thoughts on this matter are most welcome.
Communications and Media Platforms
Looking Back with PrideThe Hong Kong Insurance Brokers Association (HKIBA), which was formed as a professional representative body in 1979, responded to the Law Reform Commission Consultation on “Topic 9 – Should there be regulation of insurance intermediaries in Hong Kong and if so what form should it take?” The HKIBA response proposed, in detail, a form of “self-regulation” and this was eventually adopted by government as the blueprint for future regulation.
As such, CIB was established on 11 February 1993 by merger of the HKIBA and the Society of Insurance Brokers (SIBA).
The new CIB team, led by former HKIBA Chairman and Founding Chairman of CIB, Adrian King, negotiated the fi rst set of Minimum Requirements and Regulations for Conduct of Business for Brokers with the fi rst appointed Commissioner of Insurance, Nigel Shipman, and the Self-Regulatory regime commenced on 30 June 1995 with CIB appointed as a Self-Regulatory Organisation (SRO).
As well as continuing its professional representation role, CIB took on the onerous tasks of regulating brokers by detailed vetting and approval of insurance broking fi rms, and their chief executives and technical representatives, for registration and the setting up of a disciplinary process. The latter comprised the Investigation Board, Disciplinary Committee and Disciplinary Appeals Committee, led largely by volunteer independent legal and insurance related professionals.
Over the years, 48 persons have served as General Committee Members for varying periods and, of those, 15 have served in the role of Chairman. In 2005, CIB established its own independent Secretariat led by the Secretary General and Registrar and supported by some fi ve additional staff, providing an effective regulatory and administrative team.
During the same time some 18 independent professionals, mainly from the legal profession, have given their time generously and freely to chair and sit on our various disciplinary panels to decide cases brought in a fair and judicial manner. It is signifi cant that during the whole period as an SRO the disciplinary processes of CIB were so professional and respected that none of their decisions were ever challenged by application for a Judicial Review.
CIB has now handed over its regulatory role as an SRO to the new Insurance Authority (IA) with a sense of pride in a job well done.
At the same time, it reverts to its previous role of professional representative body, as it originally started life as 40 years ago as the HKIBA, but with all those years of accumulated experience and wisdom. CIB will act as intermediary to represent brokers’ interests to the new regulator, the IA, and to assist brokers with compliance with the new regulatory regime, and the development of professional and technical standards for the future.
LOOKING TO THE FUTURE – AND THE NEW BEGINNING
The New CIB: Your Professional PartnerCIB has more than 25 years of industry experience as a self-regulatory organisation. As such, it would be impossible to fi nd another organisation possessing our level of familiarity with insurance brokers in the city, whether these are SMEs or international fi rms.
We developed a close connection with the IA during the three-year consultation phase, and played a major role in shaping many of the new rules, regulations and guidelines for the ultimate benefi t of brokers in Hong Kong. As we look to the future, CIB will continue to work on behalf of brokers by voicing your concerns and passing on feedback to the regulator.
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REGISTRATION PERIOD DATE CPD HOURS REQUIRED REMARK
Current Period 1 January 2019 – 31 July 2020 15 Covering 19 months
Next Period 1 August 2020 – 31 July 2021 10 –
Future Periods 1 August 2021 – 31 July 2022(onwards) 15
Including a minimum of 3 CPD hours related to
“Ethics” or “Regulations”
CPD Requirements at a Glance
LOOKING TO THE FUTURE – AND THE NEW BEGINNING
Applicable for Insurance Brokers
Rules Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules
Code Code of Conduct for Licensed Insurance Brokers
Guidelines
GL22 Guideline on Exercising Power to Impose Pecuniary Penalty in Respect of Regulated Persons under the Insurance Ordinance (Cap. 41)
GL23 Guideline on “Fit and Proper“ Criteria for Licensed Insurance Intermediaries under the Insurance Ordinance (Cap. 41)
GL24 Guideline on Continuing Professional Development for Licensed Insurance Intermediaries
GL25 Guideline on Offering of Gifts
GL26 Guideline on Sale of Investment-Linked Assurance Scheme (ILAS) Products
GL27 Guideline on Long Term Insurance Policy Replacement
GL28 Guideline on Benefi t Illustrations for Long Term Insurance Policies
GL29 Guideline on Cooling-off Period
GL30 Guideline on Financial Needs Analysis
IA Regulatory ListMembers’ Comments: Chief ExecutivesIn the last issue of CIB Bulletin, we presented views from our members. This time, we have garnered feedback from chief executives, who took time out of their busy schedules to speak to members of our General Committee. These meetings took place over the last three months, and were designed to ascertain what members felt CIB’s future role ought to be.
The overriding consensus from those we spoke to is that they are keen to continue supporting CIB after the regulatory handover. What is expected is that we provide services that cater to their interests, as well as continue to offer support with compliance and liaise directly with the IA.
We at CIB are committed to representing our members – and the wider industry – in all dealings with the regulator. We strongly encourage our members to continue voicing their opinions about what they expect from CIB in the future as we come under the new regulatory regime.
• New CPD cut-off date is 31 July 2020, and the required number of hours for the fi rst period is 15 hours
• Methodology for submitting CPD proofs
• Submission of audited fi nancial statements and compliance reports to the IA
• Capital and net asset requirements increased
• PI requirements remain the same, except for deductible limits
Annual General MeetingAnnual General Meeting 2019Monday, 9 December 2019, 6:30pmHKUST Business Central
Spring DinnerTentatively in early February 2020
Forthcoming EventsCompliance Highlights for the New Regulatory Regime
Talk to us today – CIB is your voice within the industry!
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Address: Room 3407, AIA Tower, 183 Electric Road, Fortress Hill, Hong KongTel.: 2882 9943 | Fax.: 2890 2137 | Email: [email protected]
Publisher: The Giles Agency on behalf of HKCIBEditorial board: Publicity & Promotion Sub-Committee, HKCIB
Talk to us today – CIB is your voice within the industry!Phone: 2882 9943 Fax: 2890 2173 Email: [email protected]
I want to take this opportunity, as a past Chairman, to thank you and the committees, past and present, for the sterling and dedicated service that you have all put in over the years. The insurance industry in Hong Kong is, without doubt, a better place as a result of the dedication, knowledge and skill of those who have participated on the general committee and the various sub-committees since 1995. Let’s hope that the future trustees of our industry regulation treat it with the same care and attention so we can meet the challenges that will face us in the next 25 years.
Thank you again.
Mr Mark Johnson
Letter from a Past Chairman
Cocktail on 20 September 2019 – End of an Era, a New Beginning
Meetings of the General Committee
Dr Moses Cheng gives a memorable speech to guests at the CIB Cocktail Reception on 20 September 2019.
Cheers! Colleagues and peers raise their glasses at the event, which was held in the elegant surrounds of the Hong Kong Club.
The cocktail reception was themed ‘End of an era, a new beginning’, and was well attended by CIB members and friends from the IA.
Messages of Thanks Letter from IA with the heading ‘Note of Sincere Appreciation‘, signed by Stephen Po, dated 24/9/2019 We wish to take this opportunity to again thank CIB for its full engagement during the transition process, including valuable comments in the consultation of draft rules, guidelines and codes. For the IA, being able to engage with a representative body which speaks with a single voice on behalf of a large section of the insurance broking community has been extremely helpful. We look forward to continuing our engagement with you in the future.
Letter from FSTB with the heading ‘Direct Regulation over Insurance Intermediaries‘, signed by James Lau (Secretary for Financial Services and the Treasury), dated 3/10/2019 I would like to take this opportunity to express our most sincere gratitude to the Hong Kong Confederation of Insurance Brokers (CIB) for discharging its role as a Self-Regulatory Organisation for insurance intermediaries, effectively and diligently, for the past two decades. The valuable advice and staunch support of CIB is crucial to the successful implementation of the new regulatory regime.
The Membership & Registration Sub-Committee holds a monthly meeting.
A special lunch after the fi nal GC meeting in September as an SRO.
Hong Kong Insurance Brokers Association（HKIBA）是1979年成立的專業代表機構，以回應香港法律改革委員會就「題目9–香港的保險中介人應否受規管？若然應受規管，該採取什麼規管形式？」展開的諮詢。 HKIBA提交了詳細建議，提出以自我規管的形式進行規管，最終政府採納建議，將保險中介人規管列入未來藍圖。
其後 HKIBA和 Society of Insurance Brokers（SIBA）於1993年2月11日合併，成為香港保險顧問聯會。
香港保險顧問聯會這個全新團隊，由 HKIBA前會長也是聯會創會會長 Adrian King先生率領。他跟首位獲任命的保險業監理專員 Nigel Shipman協商，定立首套保險經紀業務守則的最低限度要求。保險中介自律規管機制於1995年6月30日正式生效，聯會同時獲任命為自律規管機構。
