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The Insurance Advisory Committee was briefed at its meeting today (May 29) on a proposal to review the institutional set-up of the Office of the Commissioner of Insurance (OCI).

The proposal was first raised by the Financial Secretary in his 2003-04 Budget Speech this March.

"In light of international regulatory trends and the development of the insurance industry in recent years, the government considers it necessary to review the institutional arrangement of the OCI," the Secretary for Financial Services and the Treasury, Mr Frederick Ma, said.

"The international trend is to set up financial services regulators independent of the government. Such regulator would be able to enjoy greater operational independence and flexibility, and therefore would be in a better position to meet new regulatory challenges in the insurance market," he said.

Under the existing set-up, the Insurance Authority is a public officer appointed by the Chief Executive pursuant to section 4 of the Insurance Companies Ordinance, and the Commissioner of Insurance (the Commissioner) is so appointed. To exercise his statutory functions, namely the regulation of the insurance industry, the Commissioner is assisted by the staff of the OCI. At present, all staff of the OCI are civil servants.

The insurance regulatory agencies in the UK, Australia and Singapore are all independent of their governments. In Hong Kong, the OCI is the only financial services regulatory agency still remaining within the government structure staffed by civil servants.

"The government will consult the insurance industry and other relevant stakeholders on the proposal before taking the matter forward," Mr Ma said.

End/Thursday, May 29, 2003

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