MR CHAN KIN-POR (in Cantonese): Chief Executive, Star Insurance Company Limited (Star Insurance) was found to be in financial difficulties and has gone into provisional liquidation. Fortunately, Office of the Commissioner of Insurance (OCI) has adopted a series of measures which include retaining its $200 million guarantee and restricting its scale of operation. However, most importantly, it is believed that the $2 billion compensation fund under the Motor Insurers’ Bureau could provide guarantee and meet the payment for third party injury claims of Star Insurance. It could be seen from this incident that a compensation fund is indeed highly helpful and important to consumers. In last year’s Policy Address, the Chief Executive had stated clearly that the OCI would study and review the establishment of a policy holder protection fund (protection fund). I believe many policy holders in Hong Kong, such as the 8 million life-insurance policy holders, hope that the protection fund could be launched as soon as possible so that protection and confidence of the public could be enhanced. I would like to ask about the progress of the study on the protection fund and when it could be actually launched.
CHIEF EXECUTIVE (in Cantonese): We have a compensation fund at present, but we are now pressing full steam ahead for the establishment of the protection fund so as to enable policy holders to be protected in cases of insolvency of insurance companies. You are an expert in this field, and you should know that in the first half of the year, the OCI has maintained adequate and close liaison and discussions with the insurance companies on this issue. Various factors for consideration which include the scope of protection, and whether the consumers can afford extra expenditure, have been raised by the industry. We have to balance out those factors and I hope my colleagues could report to the Panel on Financial Affairs of the Legislative Council the relevant development in July this year.
MR CHAN KIN-POR (in Cantonese): Since we all hope that the protection fund could take effect as soon as possible, I would like to ask clearly when the Government will expect the protection fund to be brought into effect. While I do not worry about the tabling of the bill to this Council, I am concerned that the discussion would be time consuming. There is an imminent need for such a protection fund to be established for the industry.
CHIEF EXECUTIVE (in Cantonese): Shall we work on it together? We would work on it as soon as possible.