*******************************************

Following is a question by the Hon Emily Lau and a writen reply by the Secretary for Financial Services, Mr Stephen Ip, in the Legislative Council today (January 17):

Question :

Will the Executive Authorities inform this Council:

(a) of the institutions or government departments with which complaints may be lodged by persons who have been refused medical insurance coverage by insurance companies because they suffer from serious illness; the respective numbers of such complaints received by those institutions or departments in the past three years, together with a breakdown by the subject of such complaints; and

(b) whether legislation is in place to regulate such acts of insurance companies; if so, of the details; if not, the reasons for that?

Reply :

Madam President,

(a) Persons who suffer from serious illnesses may approach the Equal Opportunities Commission if they have difficulties in taking out insurance policies. According to the Health and Welfare Bureau, the Commission has received four complaints in the last three years in respect of insurance-related issues. One complaint concerned the exclusion of coverage of a pre-existing condition in a hospitalization insurance plan offered by an insurance company to the complainant. Another complaint concerned the provision of accident insurance coverage by an insurance company to a group of employees in an organization with one of the employees who had one of his legs amputated excluded. The remaining two complaints were inter-related and concerned alleged poor customer service provided by the insurance company and the agent to the complainant, who had a mental illness. Persons refused medical insurance coverage may also seek help from the Hong Kong Federation of Insurers. The Federation has not received any such complaints over the past three years.

(b) Several sections of the Disability Discrimination Ordinance (DDO) are relevant to the provision of insurance services. Section 26(1) provides that persons who provide services (including insurance companies) may incur liability if they discriminate by refusing to provide specific services (e.g. insurance services) or if they discriminate in the terms and conditions upon which those services are offered. Section 26(2) provides such persons with a defence of "unjustifiable hardship".

Section 52 of the DDO makes it clear that differential treatment in relation to any class of insurance business, or similar matter involving an assessment of risk, is not unlawful if the following two criteria are met -

(i) the difference in treatment is by reference to actuarial or other data, from a source on which it is reasonable to rely; and

(ii) the differential treatment itself is reasonable having regard to the data and any other relevant factors.

In respect of the operation of insurance companies, it is the insurance companies' practice to balance all risks before deciding whether a certain medical insurance product should be provided to any person. In this context, insurance companies will make reference to relevant data on the principle of reasonableness. This approach is accepted under the DDO.

End/Wednesday, January 17, 2001

NNNN