Yesterday, SCMP published this:
Of course transparency would kill an industry whose existence depends upon fraud, bribery, and collusion.
However, the bill does not mandate commission disclosure.
“A spokesman for the Financial Services and Treasury Bureau, which drafted the bill, said the bureau will not require the IIA to use the rule. They are just codifying their power to force disclosure on ILAS should they wish to.”
Adrian King, former chairman of the Confederation of Insurance Brokers (CIB), one of the industry’s self-regulatory bodies, says that, “There is a lot in the bill that is questionable and controversial. This is one of many items.”
The only thing controversial and questionable about the new insurance bill is that it doesn’t mandate 100% full disclosure for all commissions—a type of corruptive transaction which has now been outlawed in more civilized countries, most notably the UK, the home country to a large number of CIB members.
If people like Mr. Adrian King have their way, then the Independent Insurance Authority is going to have zero independence and zero authority, and the industry will continue ripping off consumers with total impunity.
The current draft of the bill is already disgracefully weak. Concerned citizens need to raise their voices.
Information about the IIA bill can be found here. The bills committee can be contacted at: firstname.lastname@example.org
If the LegCo wants to prove that it prioritizes the public interest ahead of the interests of a criminal industry, then it needs to set out a timeline for a complete ban on commissions, with a ban on indemnity commissions becoming effective immediately.
Morever, regulation of ILAS needs to be delegated to the SFC, since ILAS is in fact an investment product—not genuine insurance. Those who sell ILAS must be held to the same standards as those who sell other investment products.