The addition of Bolus and Kirkham to the CIB’s committee is understood to be a response by the organisation to the growing number of consumer complaints in Hong Kong over investment-linked assurance schemes (ILAS), which, being independent financial advisers, they are seen as being more knowledgeable about than some others in the insurance industry.
The other three newcomers to the 12-person committee were Iain Finch, chief operating officer of Lockton Companies (Hong Kong); Clifford Webb, director of Lambert Brothers Insurance Brokers (Hong Kong); and Patrick Chan, director and general manager of Nova Insurance Consultants, who became the CIB committee’s chairman, and who, in that role, chaired last week’s meeting.
The HKCIB is one of two industry self-regulating organisations representing Hong Kong insurance brokers, the other being the Professional Insurance Brokers Association. Most of the members of both sell mainly life and protection insurance.
Hong Kong is currently moving towards having an independent insurance authority (IIA), which at the moment is due to come into existence sometime in 2015. The HKCIB is working with the Financial Services and Treasury Bureau to ensure a smooth transition from self-regulation to independent oversight through the IIA.
A key problem for the HKCIB has been a growing number of consumer complaints, particularly having to do with ILAS products, which have been the subject of much recent coverage in the local media as well as attention from Hong Kong’s Consumer Council. In September, the council reported it had received 29 ILAS-related complaints in the first seven months of 2013, an increase of 9 cases, or 45%, over the same period a year earlier.
Defenders of ILAS products, and there are some, argue that many of them are well designed, and that the bad publicity about some of them risks damaging the insurance penetration rate in Hong Kong, as has happened in some other jurisdictions where, they note, governments were over-zealous in going after poorly-designed, high-commission products.
