Press Release
LCQ11: Press releases by Hong Kong Monetary Authority and Office of the Commissioner of Insurance on enforcement actions
March 24, 2004
Following is a question by the Hon Henry Wu and a written reply by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in the Legislative Council today (March 24):
Question:
Will the Government inform this Council of the respective numbers and dates of press releases issued by the Hong Kong Monetary Authority and the Office of the Commissioner of Insurance in each of the past three years, the numbers of those which were on enforcement actions, and also provide a breakdown of the violation involved in each of the actions set out in these press releases, the legislation or rules breached, the dates at which the violations were committed and the disciplinary actions taken?
Reply:
Madam President,
We have consulted the Hong Kong Monetary Authority (HKMA) and the Insurance Authority (IA) (i.e. the Office of the Commissioner of Insurance) on the question.
The practice of the HKMA has been to publish aggregate number of breaches of key provisions of the Banking Ordinance in its Annual Report. The table below shows the numbers published / to be published in the HKMA Annual Report from 2001 to 2003. It should be noted that all these breaches were technical and unintentional in nature, were promptly rectified by the institutions concerned, and did not result in any risk to the interests of depositors or creditors.
2001 2002 2003
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Number of breaches 7 6 2
of the requirements
relating to large exposure
under section 81 of the
Banking Ordinance
Number of breaches 17 8 15
of the requirements
relating to connected
lending under section 83
of the Banking Ordinance
Number of breaches relating Nil 1 Nil
to liquidity requirement (due to
under Part XVIII of the a technical
Banking Ordinance mistake)
As for insurance, the principal function of the IA under the Insurance Companies Ordinance (ICO) is to regulate and supervise the insurance industry for the promotion of the general stability of the insurance industry and for the protection of existing and potential policyholders. The ICO mainly focuses on the solvency of the authorized insurers.
In the past three years from 2001 to 2003, there had been one case of non-compliance with section 8(3) of the ICO concerning the solvency of authorized insurers. This case involved three authorized insurers belonging to the same company group. To protect the interests of policy holders, the IA had exercised its power under section 35(2)(b) of the Ordinance to give a direction on 2 April 2001 that the affairs, business and property of the relevant insurers shall be managed by the Manager appointed by the IA. Furthermore, as required under section 35(6), the notice of the direction was published by the IA on the same date.
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