Insurance-Related Activities of Authorized Institutions

Our Ref:
Encl.:
Circulars
16 Dec 2003
Insurance-Related Activities of Authorized Institutions B1/15C 16 December 2003 The Chief Executive All Authorized Institutions Dear Sir / Madam, Insurance-Related Activities of Authorized Institutions I refer to our letter of 15 October 2003 on this subject which, among other things, referred to our proposal to introduce a new banking return to collect the requisite data so that the HKMA can get a better understanding of the insurance-related activities of authorized institutions ("AIs"). The consultation with the industry associations on the draft return, which ended on 21 November 2003, has yielded useful comments and we have revised the return accordingly to reflect such comments (please see the attached copy). You will note from the finalised return that we have taken out the proposed Part B of the return in relation to information about authorized insurers that are subsidiaries of AIs. We are in discussion with the Insurance Authority ("IA") on collection of the information from it. In other words, the finalised return contains basically the original Part A of the proposed return concerning insurance agents and brokers, which should be reported on a half-yearly basis. The first submission of the finalised return will therefore cover the period from 1 July 2003 to 31 December 2003 and should be submitted to the HKMA on or before 21 January 2004. I would also like to take this opportunity to clarify that if an AI's parent company is also an AI, there is no need for the parent company to include in its own return the statistics concerning registered insurance agents and brokers owned directly by the subsidiary AI since such information would have been included in the return of the latter. This arrangement avoids duplication of reporting and we have clarified this point in the Completion Instructions. Copies of the finalised return and Completion Instructions are enclosed with this letter. Since the first submission falls due in January 2004 and the arrangements for electronic delivery (i.e. through the STET system) are being made, manual input and submission of hard copies of the return are necessary for the first submission. Please send the return to us and mark it to the attention of your normal contact at our office. We would keep you posted of developments when the submission through STET is ready. Please feel free to contact Mr Arthur Yuen (Tel : 2878-1982) or Mr Thomas Leung (Tel :
2878-1609) should you have any questions on the finalised return.
Yours faithfully,
(Y. K. Choi) for Monetary Authority
Completion Instructions: Return of Insurance Related Activities (Form MA(BS)15) (MS Word, 33KB) Return of Insurance Related Activities (Form MA(BS)15) (MS Excel, 41KB)

c.c. Commissioner of Insurance
(Attn : Mr Ros Lam)
Last revision date : 01 August 2011

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Completion Instructions

Return of Insurance Related Activities
(Form MA(BS)15)

Introduction

1. This return collects information on insurance related activities conducted by authorized institutions (“AIs”) and their subsidiaries in Hong Kong in the capacity of insurance intermediaries[1].

Section A: General Instructions

2. This return is to be submitted by all AIs that sell insurance products via insurance intermediaries either appointed by the AIs or their subsidiaries that are registered insurance agents or brokers.

3. Information of the subsidiaries are included in this return since we recognize that some AIs, apart from being registered insurance agents / brokers on their own, also establish subsidiaries that are registered insurance agents / brokers and appoint insurance intermediaries for selling insurance products.

4. To avoid double counting, AIs are not required to report information of their subsidiaries if such information has already been reported by their AI subsidiaries.

5. Unless otherwise specified by the Monetary Authority, AIs should submit this return to the HKMA not later than 21 days after the end of June and December each year. If the submission deadline falls on a public holiday, it will be deferred to the next working day.

6. Grey cells in the return form are auto-generating cells that do not require inputing.

7. Except where otherwise stated, dollar amounts should be shown to the nearest thousand in HKD. The closing middle market T/T rates prevailing at the end of the reporting period should be used for conversion purposes.

Section B: Definitions and Clarification

8. Insurance business consists of general business and long term business which have the same meaning assigned to them under section 2 of the Insurance Companies Ordinance.

9. Insurance agent refers to a person who holds himself out to advise on or arrange contracts of insurance in or from Hong Kong as an agent or subagent of one or more insurers. A person is prohibited from holding himself out as an insurance agent unless he is appointed by an insurer and registered with the Insurance Agents Registration Board established under the Hong Kong Federation of Insurers.

10. Insurance broker refers to a person who carries on the business of negotiating or arranging contracts of insurance in or from Hong Kong as the agent of the policy holder or potential policy holder or advising on matters related to insurance. A person is prohibited from holding himself out as an insurance broker unless he is (a) authorized by the Insurance Authority under the Insurance Companies Ordinance; or (b) a member of a body of insurance brokers[2] which is approved by the Insurance Authority under the Insurance Companies Ordinance.

11. Technical representative refers to a person who provides advice to a policy holder or potential policy holder on insurance matters for an insurance agent / broker, or arranges contracts of insurance in or from Hong Kong on behalf of that insurance agent / broker. An insurance agent should obtain the confirmation of the Insurance Agents Registration Board before confirming the appointment of any person as its Technical Representative. An insurance broker should obtain the confirmation of the Insurance Authority or relevant approved body of insurance brokers before confirming the appointment of any person as its Technical Representative.

12. Responsible officer refers to a person who, along or jointly with others, is responsible for the conduct of the insurance agency business of an insurance agent. An insurance agent should obtain the confirmation of the Insurance Agents Registration Board before confirming the appointment of any person as its Responsible Officer.

13. Chief executive refers to a person who, along or jointly with others, is responsible for the conduct of the insurance broking business of an insurance broker. An insurance broker should obtain the confirmation of the Insurance Authority or relevant approved body of insurance brokers before confirming the appointment of any person as its Chief Executive.

Section C: Specific Instructions

II. Business volume during reporting period

14. For long term business, “new policies” refers to all new policies issued (including new policies issued on account of indexation increases), but do not include policy increases relating to existing policies.

15. For general business, “new policies” includes renewed policies.

16. “Total commission income” refers to the amounts, whether or not received by the insurance intermediaries during the reporting period, which are recorded during the reporting period as due to insurance intermediaries from insurers in respect of the inception, amendment or renewal of insurance.

III. Number of complaints related to insurance intermediaries during reporting period

17. The definition of “complaints” in the HKMA Supervisory Policy Manual IC-4 “Complaint Handling Procedures” is adopted for the purpose of reporting this part of the return.

18. For the first time reporting, authorized institutions are required to report only the outstanding number of complaints relating to insurance intermediaries as at the end of the reporting period. For simplicity, report this number as “New complaints” in item 2.

19. The reported outstanding number at the beginning of the period should agree with the reported number at the end of the previous period.

20. “New complaints” refers to the number of complaints received during the reporting period by the reporting institutions and / or their subsidiaries that are related to the appointed Technical Representatives / Responsible Officers / Chief Executives, or to the corporate insurance agent itself. These should include all verbal and written complaints either received directly from the complainants or referred by other channels like the HKMA, the IARB and the Consumer Council.

21. “Complaints resolved” refers to the number of complaints that have been fully investigated by the reporting institutions and the final responses have been communicated to the complainants during the reporting period. For the purposes of this return, a final response means a response from the AI which either accepts the complaint (and where appropriate offers redress), offers redress without accepting the complaint or rejects the complaint and gives reasons for doing so.

22. “Number of resolved complaints requiring further follow up actions” refers to the number of customers who remain dissatisfied with the AIs’ final responses and therefore require further follow-up actions.

Hong Kong Monetary Authority
(Dec 2003)

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[1] Include insurance agents, insurance brokers and their responsible officers / chief executives and technical representatives (have the same meaning assigned to them under section 2 of the Insurance Companies Ordinance). [2] There are presently two approved bodies of insurance brokers: (i) The Hong Kong Confederation of Insurance Brokers; and (ii) Professional Insurance Brokers Association Limited.

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Cover

SECRET
under the Banking Ordinance
RETURN OF INSURANCE RELATED ACTIVITIES
	Position of the Hong Kong Offices and Subsidiaries of the Authorized Institution that are
	Registered Insurance Agents / Brokers
		For the 6-month period ended				(dd/mm/yy)
	Name of Authorized Institution				Date of Submission
The Banking Ordinance
	Information requested in this return is required under section 63(2) of the Banking Ordinance. The return should
	be submitted to the Monetary Authority not later than 21 days after the end of June and December each year, unless
	otherwise advised by the Monetary Authority.
	Note: This return is to be prepared in accordance with the completion instructions issued by the Monetary Authority.
				We certify that this return is, to the best of our knowledge and belief, correct.
			Chief Accountant			Chief Executive
			Name			Name
				Name and telephone number of responsible person who may be contacted by
				the Monetary Authority in case of any enquiry.
			Name			Telephone Number
	MA(BS)15 (Dec 2003)

Return

Information of Insurance Intermediaries Appointed by the Authorized Institution and
its Subsidiaries that are Registered Insurance Agents / Brokers
I. Number of insurance intermediaries appointed at end of period
1	Insurance agent's Technical Representatives & Responsible Officer
	(a) Appointed by the authorized institution	0
	(b) Appointed by the subsidiaries that are registered insurance agents	0
	(c) Sub-total [=1(a)+1(b)]	0
2	Insurance broker's Technical Representatives & Chief Executive
	(a) Appointed by the authorized institution	0
	(b) Appointed by the subsidiaries that are registered insurance brokers	0
	(c) Sub-total [=2(a)+2(b)]	0
3	Total [=1(c)+2(c)]	0
II. Business volume during reporting period
1	Insurance agent business
	(a) Number of new policies [=1(a)(i)+1(a)(ii)]	0
	(i) Long term business	0
	(ii) General business	0
	(b) Total commission income in HK$'000 [=1(b)(i)+1(b)(ii)]	0
	(i) Long term business	0
	(ii) General business	0
2	Insurance broker business
	(a) Number of new policies	0
	(b) Total commission income in HK$'000	0
III. Number of complaints relating to insurance intermediaries during reporting period
1	Outstanding number at beginning of period	0
2	New complaints	0
3	Complaints resolved	0
4	Outstanding number at end of period [=1+2-3]	0
5	Number of resolved complaints requiring further follow up actions	0
Memorandum items
Name of authorized institution's subsidiaries that are insurance agents:
1
2
3
Name of authorized institution's subsidiaries that are insurance brokers:
1
2
3

Validation

	Validation Rules
	Please ensure that the error count on the overall status error is zero before submission.
	Position:	1899-12-31
	Overall Status :	There are 0 Error(s).			0
	Validation Rule		Input Value	Expected Value	Internal Status	Status
1	Part I - Item 1(a) must be an integer		0		0	Success
2	Part I - Item 1(b) must be an integer		0		0	Success
3	Part I - Item 2(a) must be an integer		0		0	Success
4	Part I - Item 2(b) must be an integer		0		0	Success
5	Part II - Item 1(a)(i) must be an integer		0		0	Success
6	Part II - Item 1(a)(ii) must be an integer		0		0	Success
7	Part II - Item 1(b)(i) must be an integer		0		0	Success
8	Part II - Item 1(b)(ii) must be an integer		0		0	Success
9	Part II - Item 2(a) must be an integer		0		0	Success
10	Part II - Item 2(b) must be an integer		0		0	Success
11	Part III - Item 1 must be an integer		0		0	Success
12	Part III - Item 2 must be an integer		0		0	Success
13	Part III - Item 3 must be an integer		0		0	Success
14	Part III - Item 5 must be an integer		0		0	Success
15	Part III - Item 3 <= (Item 1 + Item 2)		0	0	0	Success