消费者委员会就《2014 年保险公司 ( 修订 ) 条例草案》呈交立法会法案委员会的意见

1. 消费者委员会（消委会）支持政府成立独立保险业监管局（保监局）和设立保险中介人法定发牌制度，改变现时的行业自律规管制度，加强保障投保人的权益。
2. 就条例草案的主要范畴，包括：保监局的职能、管治及财政机制、中介人发牌及规管要求、金融机构监管安排，消委会在过去回应政府谘询文件中（附件一及附件二），已详细阐述了我们的意见。
3. 消委会希望藉是次法案委员会的会议，重申我们不赞同由保单持有人（即消费者）直接承担保监局大部分经费的建议。
4. 关于保监局的建议财政机制，大部分经费将来自保费中征收的0.1%征费，换言之，所有的保单持有人，日后每年都要缴交额外的征费去维持保监局的运作。根据政府谘询文件，「最终以征费支付保监局70%的开支， 而余下30%的开支则由各项牌照费和使用者服务费支付」。
5. 政府表示，保单持有人将来只须每年支付保费的0.1%作为征费，是相当少的数目，且保单亦设征费上限，征费不会对保单持有人构成财政负担。当然若以「个别」保单持有人单项保险产品计，征费金额未必有很大影响，但对「家庭」而言，就可能需支付多项保险产品（包括人寿保险、医疗保险、家居保险、学业储蓄保险及旅游保险等）的征费，增加整体及持续性的财政负担。
6. 而更重要的是，保监局监管行业的成本不应转嫁消费者。从基本原则来看，保监局的主要职能是规管保险公司及保险中介人，其中新加入的具体职能是「为促进保险业市场的可持续发展，并提升保险业界在环球保险业市场的竞争力」。若按「用者自付」的原则，既然大前提是透过成立保监局规管行业及推动保险业市场发展，成本理应由行业负责，归入为个别公司运作成本的一部分，而非直接转嫁由保单持有人支付。
7. 对保险业来说，个别保险中介人的操守行为，以及保险公司的风险管理直接反映监管成本（即当行业出现越多问题，监管工作增加而征费亦会增加）。但相对于保单持有人，他们是最终使用者，不能籍任何方式（除非不购买任何保险产品）去减低征费支出。因此，若采用向保单持有人征费的方式，不单加重消费者在保险方面的支出，亦不能提供诱因令行业审慎管理公司运作和中介人操守，藉以减低自己所须缴付的征费金额。
8. 在很多有关消费议题的讨论过程中，个别消费者的议价能力一向较低，远不及行业能够发动强大的游说行动。消委会不希望因消费者没有集体的议价能力而成为被「开刀」的对象。更重要的是，若先例一开，相信会延伸至往后有更多不同行业的监管成本直接转嫁由消费者支付。参考香港及外地的一些金融监管机构 ，监管机构的经费来源主要由行业或政府负责，而非由消费者负责。所以，消委会希望法案委员会委员审慎考虑保监局的建议财政机制并定时作出检讨，务求将转嫁消费者的监管成本减至最低。

¹ 例如：香港的金融管理局和强制性公积金计划管理局，外地的UK Financial Conduct Authority、the Office of the Superintendent for Financial Institutions in Canada、US Federal Deposit Insurance Corporation.

附件一

Submission on the Key Legislative Proposals for the Establishment of an Independent Insurance Authority

1. The Consumer Council (the Council) is pleased to submit its views regarding the consultation document issued by the Financial Services and the Treasury Bureau (FSTB) on the key legislative proposals for the establishment of an Independent Insurance Authority (IIA) in Hong Kong.
2. The Council fully supports the establishment of the IIA to assume a direct supervisory role for rendering effective regulation of the insurance industry and protection of insurance policyholders’ interests. The Council is glad to note from the proposals that the Government has taken into account a number of views ¹put forward by the Council in its previous submission.
3. With respect to the key legislative amendments proposed in the consultation document, the Council welcomes having provisions to enhance consumer protection, including the introduction of a licensing framework for insurance intermediaries to replace the existing self-regulatory regime, establishment of a register of insurance intermediaries for public inspection, requiring the appointment of a responsible officer (RO) by insurance companies to ensure compliance of their intermediaries, and introducing a stopgap damage control measure to suspend licensed insurance intermediaries (or an RO) from carrying on further damaging acts.
4. Whilst appreciating the positive aspects as mentioned above, the Council is of the view that there are areas which require further consideration to protect the interests of policyholders. These include:
   1. Composition of the Governing Board;
   2. Eligibility criteria for obtaining licenses;
   3. Funding principles;
   4. Regulatory arrangements with other financial regulators; and
   5. Disclosure of commission.

Composition of the Governing Board – Avoid conflict of interests

5. The Council supports establishing a Governing Board comprising a wide cross-section of the community to provide direction to the IIA.
6. Whilst recognizing the need for understanding and knowledge of the insurance industry, the Council considers that including representatives from the insurance industry on the Governing Board should be given more careful thoughts as this could undermine the purpose of setting up an independent regulator to oversee the insurance industry.
7. Despite that industry members may act on an ad personam basis, the general public may still perceive them to have substantial influence over the IIA and thereby cast doubt on the independence of the IIA.
8. In any case, the two proposed Industry Advisory Committees should provide adequate channels for the insurance industry to express their views and give advice to the IIA Governing Board.
9. If appointment of members with industry knowledge has to be made, the Council is of the view that consideration must be given to selecting people who are no longer insurance practitioners and who have no current link with any insurance associations and/or insurers.

Eligibility criteria for obtaining licenses – Demand for raising qualification / standard

10. It is noted from the consultation document that the IIA will adopt the existing eligibility criteria for licensing insurance intermediaries. However, it is not clear if such approach will apply to pre-existing licensed intermediaries only, or extend to all including existing and new intermediaries entering the insurance profession.
11. The Council urges the Government to consider raising the qualification required of insurance intermediaries, particularly for new entrants, in order to ensure that there are competent intermediaries to handle the more and more complicated insurance products emerging in the market. The Council believes it is very important for insurance intermediaries to be equipped with high academic qualification so that they will be capable to fully understand the relevant insurance products before they recommend them to consumers.
12. The Council is of the view that setting higher eligibility criteria will help enhance the professionalism of insurance intermediaries.

Funding principles – Justification for requiring insurance policyholders to bear most of the regulatory costs

13. In its 2010 consultation, the FSTB proposed that the Government would introduce legislation to impose a market levy “a levy of 0.1% on premiums of all insurance policies” to fund the IIA. The Council had expressed in its previous submission great concern as to who should be responsible for paying the levy.
14. Under the current proposal on funding of the IIA, the vast majority of the regulatory costs (70% of the funding cost of the IIA) will be rolled over to insurance policyholders, in the form of a 0.1% levy on premiums of all insurance policies. On the other hand, insurance intermediaries will be waived payment of licence fees for the first five years.
15. Notwithstanding that the Government may consider the amount of levy to be paid by policyholders as “minimal”, the Council believes that the proposed funding mechanism should be given adequate disclosure and deliberation at various consultations and be brought to the attention of the public.
16. Whilst the rate of 0.1% on the premium may seem minimal (a levy of $10 on a policy with annual premium of $10,000), one should not lose sight of the fact that an individual often has more than one insurance policy (e.g. medical, travel, household contents, life, investment-linked policies). And for a household of many members each covered by various policies, the financial impact on the household cannot be overlooked.
17. More fundamentally, there seems little justification for making policyholders bear the levy. The IIA will serve the primary objective of maintaining a healthy and stable development of the insurance market, but 70% of its cost is expected to come from policyholders. The Council is of the view that imposing the levy on policyholders is not substantiated and will not pose an incentive for the insurance industry to practise prudential management or to ensure insurance intermediaries will comply with the regulations.
18. On the contrary, if the levy is to be charged on the insurance industry using a risk-based approach, those who operate in a prudent/less-risky manner can save on regulatory cost.
19. Notwithstanding that policyholders may ultimately take on part of the cost indirectly, the Council is of the view that the cost of regulation should be charged on and borne by the insurance industry as part of its operational cost. The Council strongly urges the Government to commission research on using a risk-based approach in assessing the appropriate levy levels to be payable by industry participants.
20. If, however, it is considered that policyholders should fund the IIA, it is necessary to make clear to the public which part of the IIA’s work relates directly to policyholders. The Council believes that the proposed establishment of the IIA should serve to instill public confidence in the insurance industry and the regulatory cost should not be seen to shift heavily onto policyholders. The Council urges that the levy to be imposed should be allocated to initiatives that of educational nature to strengthen the capability of policyholders and potential policyholders to understand the many insurance products available on the market.

Regulatory arrangements with other financial regulators – Need effective supervision

21. With regard to the proposed regulatory arrangements for banks’ insurance intermediary activities, the Council is of the view that the regulatory framework should be comprehensive enough so as not to leave any unregulated areas or ‘regulatory gaps’. It would be unsatisfactory if activities (e.g. the sale of ILAS products) were left unregulated due to lack of clarity as to which regulator is responsible.
22. The Council considers that if the proposed regulatory arrangements are to be adopted, it will be important for the IIA and other financial regulators to take collaborative efforts to deal with issues such as regulatory gaps, regulatory overlaps, inconsistency of regulations and differences in operational standards, so as to achieve effective supervision of the insurance intermediaries.
23. From a wider perspective, the Council is of the view that close cooperation amongst financial sector regulators (i.e. the IIA, HKMA, SFC and MPFA) is essential for ensuring the effective supervision of the financial system as a whole. This requires the IIA and other financial regulators to have close communication and cooperation to deal with innovations of new products which may not have been envisaged at the time of establishment of their respective regulatory structure.

Disclosure of commission – Enhance consume confidence

24. To mitigate any potential conflicts of interest arising from the possibility that the level of commissions may encourage insurance companies to develop business strategies that inappropriately incentivize intermediaries to sell certain insurance products, the Council considers it important for the IIA to make a requirement for intermediaries to disclose to potential policyholders at the pre-sale stage the level of commission (or benefits) receivable from product issuers for the sale of the products concerned.
25. The Council believes that commission disclosure could enhance consumer confidence in the insurance industry and therefore should be required of the intermediaries.

Footnotes:

1. Including the establishment of the IIA should not be subject to political, governmental and industry interference (the current consultation proposes that there will be no government representative on the IIA Governing Board); the IIA should be empowered to direct insurers or insurance intermediaries to stop practices that are unsafe or unsound for the protection of policyholders (proposes the introduction of a stopgap damage control measure); the interests of policyholders would not be jeopardized as a result of lax regulation, for enhancing the competitiveness of the insurance industry (specifies that the IIA is to maintain competitiveness of the industry without undermining regulation); and introduction of other fees for demand-driven services to reflect regulatory effort (proposes service charges on insurers and licensees).

附件二

Submission on the Proposed Establishment of an Independent Insurance Authority

1. The Consumer Council (the Council) is pleased to submit its views regarding a consultation paper issued by the Financial Services and the Treasury Bureau (FSTB) on the proposed establishment of an Independent Insurance Authority (IIA) in Hong Kong.
2. The following sets out the Council’s views to the questions raised in the consultation paper that have direct implications to the interests of consumers/insurance policyholders, for consideration of FSTB.

The Council's Views

Q1. Do you agree that an independent IA should be established along the principles set out in paragraph 2.6 (of the consultation paper)?

3. The Council is glad to see that the Government has taken into account the Council’s previous comments on the need for changes to the existing self-regulatory mechanism for the insurance industry by formulating proposals on establishing an IIA to regulate insurers and insurance intermediaries and protect the interests of insurance policyholders.
4. Given that the issue of establishing an IIA has been debated for a long time with not much progress made, the Council urges the Government not to delay any further especially in light of rising insurance complaints₁ which could reflect the inability of the self-regulatory mechanism to render effective regulation of the insurance industry and protection of policyholders’ interests.
5. The Council believes it is necessary for the proposed IIA to assume a direct supervisory role over the insurance industry which can give it credibility and ensure impartiality in dealing with insurers and insurance intermediaries who breach fair practice.
6. As to the principles set out in the consultation paper, the Council believes that having principles alone is not sufficient to achieve any lasting result. It is important for the IIA to devise a guide to action for it to perform its functions and meet its supervisory objectives effectively.

Q2. Do you think that there are other important principles in addition to those set out in paragraph 2.6 that the Administration should adopt in working out the detailed legislative proposals for the establishment of the independent IA? If so, what are they?

7. Other than the proposed core principle for the IIA to be ‘independent’, both operationally and financially, of the Government in exercising its functions and powers, the Council considers the following fundamental principles should be clearly set out in the legislation for the establishment of the IIA:
   1. ‘Accountability’ - to clearly define its functions and responsibilities so that its performance can be objectively assessed and made accountable to the community;
   2. ‘Transparency’ - to maintain high level of transparency in its operations, for the purpose of ensuring accountability;
   3. ‘Fairness’ - to adopt processes which are fair and equitable; and
   4. ‘Not subject to political, governmental and industry interference’ - to carry out responsibilities without influence.

Q3. Do you agree that the independent IA should have an expanded role beyond the existing functions of the IA as set out in paragraph 3.1? If so, do you agree that the independent IA should assume the additional functions as proposed in paragraphs 3.3 and 3.4?

8. The Council considers that the IIA should have an expanded role in addition to directly supervising the conduct of insurance intermediaries. The Council welcomes the Government taking on board the Council’s views on the need to enhance consumer financial capability by giving the IIA an explicit role in proactively educating the public about insurance matters, rather than merely giving it an institutional separation from the government system as proposed in the Government’s 2003 consultation.
9. As consumers will be taking on more responsibility in future in financing their medical needs, it is expected that there will be increasing demand for enhancing consumer financial capability and greater consumer protection in relation to insurance products. The Council therefore supports making it one of the IIA’s functions to give appropriate information and education program to enhance public understanding in view of the complex nature of insurance products which renders it difficult for consumers to fully understand and make choices appropriate to meet their needs.
10. Since a new dedicated Investor Education Council (IEC) will be set up in future to holistically oversee the need for investor education and delivery of related initiatives in respect of the entire financial sector in Hong Kong, the Council considers that necessary arrangements should be made by the IIA to ensure close collaboration with the IEC to minimize overlapping or gaps in education work with respect to insurance issues.
11. With regard to additional functions to be taken up by the IIA, the Council considers that the IIA has a role to play in addressing public concern about the reasonableness of insurance premium increases and the suitability of high risk and complicated insurance products on offer to the consuming public. The Council believes it is legitimate for the public to expect that the IIA will do more than what the existing self-regulatory mechanism is doing to ensure the interests of policyholders are well protected.

Q4. Do you agree the independent IA should also have a duty to enhance the competitiveness of the insurance industry, which will help to reinforce Hong Kong’s status as an international financial centre?

12. Recognizing the need to strike a balance between regulation and market development, the Council agrees that the IIA should be given a duty to enhance the competitiveness of the insurance industry for reinforcing Hong Kong’s status as an international financial centre.
13. Nevertheless, the Council is of the view that consideration should be given introducing measures to ensure the interests of policyholders would not be jeopardized as a result of lax regulation in licensing standards for market players, or to deter offer of inappropriate insurance products or use of aggressive marketing tactics which may be disguised as market competition.

Q5. Do you agree that the independent IA should be vested with additional powers as proposed in paragraph 4.7 to enable it to regulate insurers more effectively?

14. Yes, the Council supports vesting the IIA with explicit powers to enter into premises for inspection and investigation, powers to impose supervisory sanctions and power to prosecute summary offence, as proposed in the consultation paper.
15. To equip the IIA with a wider range of instrument of different intensity, the Council suggests the IIA should be empowered to take additional actions such as the delivery of a warning or the laying down of institution-specific standards and directions targeted at institutions wavering between compliance and deviance, in additional to the option of enforcing more severe measures such as imposing fines, public reprimand, and suspension or revocation of authorization.
16. If the above proposed tools are used appropriately, the Council believes that a market player who has attracted the IIA’s special attention by failing to comply may need to bear the burden of extra, intensified requirements. The aim of having in place such additional tools is to help reduce at an early stage the likelihood of failure or non-compliance.
17. As regards the existing interventionary actions (e.g. limitation of premium income, custody of assets by an approved trustee, and requirement of a special actuarial investigation), the Council suggests that the IIA should be empowered to direct insurers or insurance intermediaries to stop practices that are unsafe or unsound, for the protection of policyholders.

Q6. Do you consider that the existing self-regulatory arrangements for insurance intermediaries should be changed, and if so, do you support that Option 2 (i.e. direct supervision of insurance intermediaries by the independent IA) should be pursued? If not, why?

18. Yes, in its previous submissions and consultancy interviews, the Council opined that the current regulatory system relies heavily on various industry bodies (e.g. HKFI for insurers, IARB for insurance agents, CIB & PIBA for insurance brokers, ICCB for claim disputes) to assume the fragmented self-regulatory functions. The absence of a direct supervisory role across the insurance industry has caused confusion to consumers in particular when they are lodging complaints or seeking redress. The Council believes more effective and direct regulation of the insurance industry should be introduced to keep in line with Hong Kong’s position as an international financial centre.
19. The Council is of the view that the self-regulatory mechanism may not be effective to provide adequate protection to consumers. The public may perceive that self-regulatory bodies often have vested interests as they are sponsored by their industry members and may be less than diligent in their pursuit against industry members who have breached fair practices. The Council has long urged that a review of the regulatory arrangements for the insurance industry in its entirely should be carried out.
20. The Council therefore supports that the existing self-regulatory mechanism for the insurance industry be changed and sees it as an advancement in protection of the interests of policyholders if the IIA is to assume a direct supervisory role over the insurance industry (i.e. Option 2).

Q7. Do you consider that in relation to the sale of insurance products in banks, the HKMA should be vested with powers similar to those for the independent IA to allow HKMA to regulate bank employees selling insurance products given the different client profile and sale environment in banks?

21. As to the proposed ‘shared regulatory responsibility’ between the IIA and HKMA, the Council is of the view that regulation should be comprehensive enough so as not to leave any unregulated areas, the so called ‘regulatory gaps’. It would be unsatisfactory if activities were left unregulated due to lack of clarity as to which regulator is responsible.
22. In light that a single financial regulator (as advocated by the Council) may not be forthcoming in the near future, the Council considers that if the proposed ‘shared regulatory responsibility’ is to be adopted, it will be important for the IIA and HKMA to take collaborative efforts to ensure regulatory consistency, so as to achieve effective supervision of the insurance intermediaries. For example, there should be increasing cooperation and harmonization of policies and procedures and strengthened communication if HKMA is to be vested with powers similar to those of the IIA to regulate bank staff selling insurance products.
23. In this context, the Council is of the view that enhanced insurance-banking linkages are necessary and that a formal inter-regulator communication platform as suggested in the consultation paper (para.7.7) should be established to promote regular exchanges on product trends and associated risks for insurance policyholders.
24. From a wider perspective, the Council is of the view that close cooperation amongst financial sector regulators (i.e. the IIA, HKMA, SFC and MPFA) is essential for ensuring the effective supervision of the financial system as a whole. This requires the IIA and other financial regulators to have close communication and cooperation to deal with innovations of new products which may not have been envisaged at the time of establishment of their respective regulatory structure.
25. The Council is glad to note that the Council of Financial Regulators chaired by the Financial Secretary and the Financial Stability Committee chaired by the Secretary for Financial Services and the Treasury have been set up to provide regular inter-regulator forums to, amongst others, deliberate on regulatory and supervisory issues carrying a cross-sectoral impact. The Council expects to see that the forums will deal with issues such as regulatory gaps, regulatory overlaps, inconsistency of regulations and differences in operational standards.

Q8. Do you agree that the recommendations as set out in paragraphs 6.5 to 6.8 should be pursued for the independent IA to operate as an independent entity? Any other views?

26. In general, the Council supports the IIA be established and be organized along the proposed structure as set out in the Annex of the consultation paper.
27. Under the proposed structure, the Council notes that a new ‘Market Conduct’ division will be set up for ‘supervision of sales conduct of insurers and intermediaries’, alongside with ‘complaints and investigations’. However, it is not clear to the Council as to its mode of operation in terms of ‘complaints and investigations’, for instance, whether the new division will handle and resolve complaints lodged by policyholders (i.e. to assume the responsibilities of the SROs for handling of complaints against insurance intermediaries), or it will simply act as a referral mechanism. It is important to give a clear message to the public on the responsibilities of the IIA in terms of complaints handling.
28. As the IIA will be the primary regulator to stipulate regulatory requirements for the insurance industry, the Council expects the IIA to act as a focal point for complaints handling, thereby enabling it to better understand what problems are encountered by policyholders and consider if any improvements are needed.

Q9. Do you agree with the proposed checks and balances and governance arrangements for the independent IA as set out in this Chapter (Chapter 7 referred)?

29. The Council fully supports establishing a Governing Board comprising a wide cross-section of the community to provide leadership and direction to the IIA. As an advocate for consumer interests, the Council welcomes its inclusion in the list of stakeholders for consideration of appointment as a member of the Governing Board. The Council will be happy to have a channel to express views from consumer perspectives for policy formulation.
30. The Council also considers that setting up an advisory committee with inputs from users/consumer groups is important for enhancing understanding of issues of interest to existing and potential policyholders.
31. Whilst recognizing the need to strike a balance, the Council cautions that the composition of the advisory committee should not be overwhelmed with industry body representatives as this would undermine the effectiveness of the advisory committee.
32. In respect of the proposed checks and balances, the Council considers that the proposed Appeals Tribunal and Process Review Panel, to ensure consistency and equity in the regulation of insurers and insurance intermediaries, are appropriate to oversee the proper exercise of the powers to be vested in the IIA.

Q10. Do you agree that the Government should provide a lump sum to support the independent IA in its initial years of operation and the independent IA should seek to reach full cost recovery in six years?

33. Yes, the Council believes it is important for the Government to provide adequate resources, both for financing and supporting services, to back up the IIA in its initial years of operation. Adequate resources are prerequisite to enable the IIA to recruit, train and retain a cadre of experienced professional staff.
34. If the IIA were to have only limited resources at hand and lacked staff experienced and skillful enough to ably fulfill the regulatory tasks in question for the protection of policyholders’ interests, it would be very difficult if not infeasible for the IIA to render adequate regulation and supervision.

Q11. Do you agree with the proposed fee structure as set out in paragraphs 8.2 and 8.6?

35. It is noted in the consultation paper that the proposed fee structure requires funding by a combination of levy, various licence and users fees. However, it is not clear from the consultation paper whether the proposed 0.1% levy on insurance premiums for all insurance policies will be charged from insurers or insurance policyholders. Clarification of how the levy would be raised is required.
36. In the consultation paper, SFC is quoted as an example to illustrate funding source can be contributed by market levy from investors. However, as far as the Council is aware, many regulators or industry associations tasked with supervision roles for protection of public interests in Hong Kong, such as HKMA, the Mandatory Provident Fund Authority, the Hong Kong Deposit Protection Board, the Estate Agents Authority, etc are not funded (or directly funded) by levy collected from consumers.
37. With respect to other jurisdictions, the Council understands that financial regulators (e.g. the Financial Services Authority of the UK, the Office of the Superintendent for Financial Institutions of Canada, the Federal Deposit Insurance Corporation of the US) raise funding from industries (or through industry levy paid to the government which in turn allots funding to regulators) instead of from consumers.
38. The Council is of the view that in determining the appropriate funding arrangement, there should be a means of recovering from the insurance industry the costs of the prudential supervision and regulation of that sector and for the market integrity maintenance functions to be performed by the IIA.
39. If the market levy is to be raised from policyholders, the Council believes it is necessary to make clear to the public which part of the IIA’s work relates directly to policyholders which would require raising of a substantial portion (70%) of the IIA’s expenditure from the consuming public. The Council considers that the proposed establishment of the IIA should serve to instill public confidence in the insurance industry and not to shift regulatory cost to policyholders.
40. Notwithstanding that policyholders may eventually take on the cost indirectly, the Council feels strongly that the cost of regulation should be borne by the insurance industry as part of its operational cost, instead of by policyholders.
41. In relation to the proposed mitigating measures to reduce the impact on the insurance industry, it is noted that a waiver of licence fee for insurance intermediaries will be provided in the first 5 years after the establishment of the IIA. The Council is of the view that if any levy is to be raised directly from policyholders, a waiver should also be considered for policyholders.
42. As to the funding ratio (i.e. 70% from market levy, 30% from various licence fee and users fees), the Council is of the view that the direct cost of regulation in terms of market levy should be reasonable and not pose an undue burden. This is especially important where, as is usually the case, costs are ultimately passed on to policyholders. It is therefore important for the amounts raised and how they are utilized to be transparently disclosed and accounted for to the public.
43. Apart from annual charges by reference to the type of license and volume of business of a regulated entity, the Council considers it possible to introduce other fees for demand-driven services e.g. charging regulated entities for complaints handling to reflect regulatory effort.

Other comments

44. From the long term, the Council would like to take this opportunity to put forward its view on the need for the Government to carry out reviews to assess the effectiveness of having separate financial regulators to take on supervisory responsibilities in regulating the financial sector, from the perspectives of consumers and the economy as a whole.
45. Traditional distinctions between different types of financial institutions, financial products and distribution channels have become extremely blurred. This could make sectoral supervision less meaningful (as reflected in the proposal of empowering HKMA to take on powers similar to those of the IIA in supervising bank staff selling insurance products) or at least more complicated (as a result of the presence of financial conglomerates engaging in banking, insurance and securities activities which makes it difficult for a regulator for a particular sector to form a view of the overall risks facing the entire conglomerate). It is therefore important for the Government to conduct periodical reviews to assess the appropriateness of the existing regulatory models to suit the changing needs of Hong Kong.

Table 1: Consumer Council's insurance complaint statistics

¹ In the period January 2000 - August 2010, the Council received a total of 4,155 insurance complaints (see Table 1) which might only represent the tip of the iceberg.