Speech at Panel on Financial Affairs

Budget of the Insurance Authority for the financial year 2019-2020

Recruitment of staff of the Insurance Authority

Mr CHAN Chun-ying noted that IA currently had about 270 staff members and enquired whether it planned to fill vacancies to reach the full establishment of about 300 in 2019-2020.

C/IA advised that in order to cope with prevailing workload, IA would persist with its recruitment drive. Moreover, IA would work with related parties to hold seminars and briefings for students on the prospects of and career opportunities available in the industry. Given the impending launch of the New Licensing Regime, the demand for manpower would rise further. IA would adopt a multi-pronged approach and pursue the use of information technologies to conserve staff resources.

Remuneration of the staff of Insurance Authority

Noting that IA did not set up a remuneration committee, Mr CHAN Chun-ying enquired how the salary levels of its staff were determined, and whether IA would consider establishing such a committee which was common in the private sector.

C/IA replied that the Corporate Services Committee of IA was tasked to review the structure and level of staff remuneration, and recommend adjustments where necessary

Financial position of the Insurance Authority

Mr CHAN Chun-ying noted that according to IA’s projection, its reserve would be reduced to $104.4 million by March 2020, which was only enough to support about three months of operating expenditure. He enquired how IA would cope with this problem.

C/IA advised that it was the Government’s policy objective for IA to be financially independent. At present, there was limitation for IA to achieve full cost recovery as premium levies (primary source of income) was capped. C/IA assured members that IA would discuss this matter with the Government in due course while actively exploring new sources of income.


Consultation on Uncertificated Securities Market Regime


Mr CHAN Chun-ying pointed out that in taking forward the USM initiative, the Administration should be mindful of the need of elderly investors who might prefer to hold their securities in paper certificates. Noting that the initial stage of the USM regime would focus first on IPOs, Mr CHAN enquired about the timetables for extending the regime to cover existing shares and achieving a full USM regime. He also sought information on the Administration’s projection on the acceptance level of the USM regime by investors.

DS(FS)1 said that the proposed legislative amendments were to provide a legal framework for implementing a USM regime in Hong Kong under the Revised Model. The USM regime would be taken forward in a progressive manner taking into account the operational experience, market readiness and investors’ acceptance. It was expected that the first batch of securities might begin to be held and transferred without paper documents in around 2022 if the necessary legislative amendments were in place and systems development was ready. While the Government would not devise a concrete timetable for implementing a full USM regime lest this would compromise flexibility and it might not be feasible to forecast investors’ acceptance of the USM regime, the Government’s ultimate goal was to achieve a full USM regime as early as possible.