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To help the insuring public assess whether policy replacement is in their best interests, the Office of the Commissioner of Insurance and the insurance industry are joining forces to step up self-regulatory measures in protecting consumer interests.

Speaking at a press conference today (December 16), the Commissioner of Insurance, Mr Richard Yuen, reminded the insuring public to exercise care when making any decision on life insurance policy replacement.

"To protect their own interests, policyholders should carefully compare their existing and new insurance policies and assess whether policy replacement is in their best interests," Mr Yuen said.

"Under the Code of Practice for Life Insurance Replacement, a Customer Protection Declaration (CPD) Form has to be prepared to ensure that the insurance intermediary has clearly explained the potential consequences and disadvantages of policy replacement to a life policyholder. Policyholders are reminded to carefully examine the CPD Form before signing it, and never sign a blank or incomplete form," Mr Yuen added.

"Those who are misinformed or misled in the process of policy replacement may lodge their complaints to the Insurance Agents Registration Board, approved bodies of insurance brokers or insurers issuing the new policies as appropriate," he said.

Elaborating on the purpose of the CPD Form, the Chairman of the Life Insurance Council, Mr Richard Ip said, "Life policyholders should ask questions such as whether the guarantee returns of the new policies are better than the existing ones, whether the premiums of the new policies are higher than those of the existing ones, whether the protection will be continuous without interruption and not affected by the change of health conditions or occupations, whether the supplementary benefits will be affected, and whether the existing protection under the 'incontestability clause' and 'suicide clause' will be lost, etc."

"Most important of all, policyholders should ask their agents/brokers if there are other alternatives to life insurance policy replacement," Mr Ip stressed.

"To cope with the market developments, the Life Insurance Council of the Hong Kong Federation of Insurers has recently revised the CPD Form, expanding the questionnaire so that life policyholders will be better informed of the implications of policy replacement. The new form will come into effect on January 1, 2005," Mr Ip said.

Also present at today's press conference were Hong Kong Confederation of Insurance Brokers member, Mr Andrew Eden and Chairman of the Professional Insurance Brokers Association, Mr Sammy Lui. Self-regulatory organisations of the insurance industry have pledged full support for the implementation of the new CPD form.

The Consumer Council welcomes the new measures adopted by the insurance industry in strengthening the protection of consumer interests.

Ends/Thursday, December 16, 2004

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