The Securities and Futures Commission authorizes all ILAS products, and it publishes the principal brochures on its website. See HERE.
It is therefore possible for consumers, brokers, the media, and people such as myself to evaluate and compare all ILAS products (although this is complicated by the smoke and mirrors, complex multi-layered fees, fake penalties, phony bonuses, secret commissions, etc.).
Apart from ILAS, all other investment products sold by insurance companies are not authorized by the SFC. These investment products include whole life, universal life, endowment policies, and annuities. The Office of the Commissioner of Insurance does not publish the principal brochures of these products on its website, nor do any of the self-regulatory organizations. It seems the only way to obtain brochures for non-ILAS investment products is to contact individual insurance companies or an insurance intermediary, give them your personal contact information, show some interest in buying a product, and hope they don’t harass you afterwards.
I was able to find some brochures on a few companies’ websites, but these brochures contained minimal information. They were nowhere near as informative as SFC-authorized ILAS brochures. The non-ILAS brochures said to contact the insurance company for more information.
From personal experience, I have discovered that it is extraordinarily difficult and burdensome for a consumer to shop and compare different products sold by insurance companies.
This total lack of transparency has allowed the insurance industry to gouge consumers for decades. The exploitation is so notoriously bad that the only type of product sold by life insurance companies which is not considered a ripoff is term life insurance—specifically because it isn’t bundled with a massive investment component.
If Hong Kong wants to stop insurers from robbing its citizens, then Hong Kong needs to follow in the footsteps of Singapore.
The law firm, Conventus Law, gives a nice summary of what Singapore is doing:
MAS [the Monetary Authority of Singapore] will launch an online web aggregator to enhance the transparency of information in respect of life insurance products. The web aggregator will allow consumers to compare the premiums and other key features of life insurance products offered by various insurers so that they can make informed financial decisions. MAS will require participating life insurers to submit information on life insurance products for publication on the web aggregator, and to pay a fee for the hosting, operation and maintenance of, and system changes to, the web aggregator.
Life insurers catering to the retail market will also be required to offer a class of life insurance products directly to consumers, without charging any commissions. This will provide consumers, who do not require financial advice, with access to a class of life insurance products that meet their basic protection needs at a lower cost. The features of such products will be broadly standardised to make them easier for consumers to understand and purchase without financial advice.
According to MAS’s website, the new web aggregator will be ready within the first few months of 2015.
Hong Kong lawmakers and regulators need to seriously consider adding an insurance web aggregator and mandatory commission-free products to the Insurance Companies (Amendment) Bill 2014.
Hong Kong consumers need transparency and choice just as much as Singaporeans do.