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The Commissioner of Insurance, Mr Benjamin Tang, today (September 26) reminded the insuring public of the need to do their homework before making any decision on life insurance policy replacement.
"To protect their own interests, policyholders should carefully compare their existing and the new insurance policies and assess whether policy replacement is in their best interests before making a decision," Mr Tang said.
"It is not uncommon for the Office of the Commissioner of Insurance (OCI) and the Hong Kong Federation of Insurers (HKFI) to receive complaints from policyholders who have suffered losses after replacing their existing life policies with new ones," Mr Tang added.
To help the insuring public assess whether the policy replacement is in their best interests, the OCI and the insurance industry are joining hands to launch an educational campaign.
Speaking at a press conference today (September 26), Mr Benjamin Tang said, "The OCI has produced a new educational pamphlet 'Life Insurance Policy Replacement - What you need to know' to provide some useful guidance for the insuring public."
The pamphlet provides useful tips of "Dos and Don'ts" for policyholders who are considering life policy replacement. They are encouraged to ask questions such as whether the returns offered by the new policies be guaranteed, whether the protection be continuous without interruption, and whether the existing protection under the "incontestability clause" be lost, etc.
Policyholders are also reminded to carefully examine the Customer Protection Declaration (CPD) form before signing it, and never sign on a blank or incomplete form.
"One should not blindly rely on the insurance intermediaries as they may have a conflict of interests. The policyholder will be held responsible for the content of the document once he/she signs on it," Mr Tang stressed.
As part of the educational campaign, the OCI has also produced an Announcement in the Public Interest (API) to drive home the above messages. Feature articles have been included in the OCI's quarterly newsletter "I lens" to help the insuring public better understand the potential disadvantages of policy replacement.
Insurance intermediary bodies have pledged full support for the OCI's new educational initiatives.
"To tie in with our new initiatives, Life Insurance Council of the HKFI has recently revised the Code of Practice for Life Insurance Replacement which requires an insurance applicant to declare the receipt of a copy of the Insurance Authority's educational pamphlet in the CPD form. The new code will become effective from October 1, 2002," Mr Tang pointed out.
"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, insurers issuing the new policies, or the OCI as appropriate," he added.
Also present at today's press conference were the Chairman of the HKFI Life Insurance Council, Mr Anthony Lau; General Committee Member of the Hong Kong Confederation of Insurance Brokers, Mr Gavin Tyndale; Chairman of Professional Insurance Brokers Association, Mr Sammy Lui; President of Life Underwriters Association of Hong Kong, Mr Bee Lee; and President of General Agents and Managers Association of Hong Kong, Ms Queenie Chan.
The new API will be broadcast on televisions and radios from today while copies of the pamphlet will be available for collection at the OCI, Public Enquiry Service Centres of District Offices and Consumer Council. The API and pamphlet can also be viewed and downloaded from the OCI's website (http://www.info.gov.hk/oci) respectively.
End/Thursday, September 26, 2002
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