The government has published a commencement notice for specified provisions (Initial Provisions) of the Insurance Companies (Amendment) Ordinance (Amendment Ordinance). The designated commencement date for the Initial Provisions is 7 December 2015.
This follows the Secretary for Financial Services and the Treasury’s previous announcement (see previous blog entry) that the Amendment Ordinance would be introduced in three stages to facilitate the overhaul of the existing regulatory regime. The most recent target timeline as outlined on 7 October 2015 by a Legislative Council brief is as follows:
- Stage 1: Establish the Provisional Insurance Authority (PIA) (without regulatory functions and co-existing with the Office of the Commissioner of Insurance (OCI) by end-2015. It is intended that relevant guidelines for insurers and necessary subsidiary legislation will be ready before the commencement of Stage 2.
- Stage 2: PIA to become the independent Insurance Authority (IIA) and to replace the OCI by taking over its regulatory functions such as the prudential and conduct regulation of insurers, frontline regulation of Mandatory Provident Fund intermediaries and enforcement of the anti-money laundering regime. The self-regulatory insurance intermediary regime will continue – approximately December 2016.
- Stage 3: IIA to implement the statutory licensing regime and take over the regulation of insurance intermediaries from the three existing self-regulatory (broker and agent) organisations – approximately December 2018-2019.
The Initial Provisions provide for the establishment of the PIA and related matters. The PIA will initially be established as the IIA, but renamed the PIA for a period up until the disbandment of the OCI. The PIA will not be vested with any regulatory powers before taking over the duties of OCI. At that point, the PIA will revert to the IIA and carry out the regulatory powers given to it. The Initial Provisions deal with:
- the establishment of the PIA and its constitution
- its powers
- checks and balances
- the appointment of industry advisory committees.
The Hong Kong Legislative Council passed the Insurance Companies (Amendment) Bill 2014 on 10 July 2015 and the text of the Amendment Ordinance was gazetted on 27 July 2015. For further information, please see our previous blog entry.