LCQ20 Insurance Claims Complaints Bureau (1.3.2000) by xpj11142


									                                Press Release

               LCQ20: Insurance Claims Complaints Bureau
                       Wednesday, March 1, 2000

      Following is a question by the Hon Cheung Man-kwong and a written
reply by the Secretary for Financial Services, Mr Rafael Hui, in the Legislative
Council today (Wednesday):


      In November last year, an insurance company which was dissatisfied
with the adjudication of the Insurance Claims Complaints Bureau on an
insurance policy's compensation claim, applied to the High Court for judicial
review and won the case. In this connection, will the Government inform this
Council whether:

(a) it knows the criteria adopted by the Bureau for determining if a complaint
lodged by an insurance policyholder is substantiated; whether such criteria have
spelt out if the literal interpretation of the terms in a policy or the judgement
made by common sense should prevail in the event of discrepancy between the
two; whether the Bureau has amended such criteria in the light of the court's
ruling; if it has, of the details;

(b) it knows if the Bureau has plans to amend its rules and regulations or
adopt other measures to prevent insurance companies from overturning, by
means of judicial review, the Bureau's adjudication on insurance compensation
claims made against them;

(c) the Bureau is an organization exercising public functions under the
auspices of the Government; and

(d) the Administration will conduct a review on the operations and structure
of the Bureau to ensure that the interests of insurance policyholders are duly


Madam President,

(a) The Insurance Claims Complaints Bureau (ICCB), is set up as a company
limited by guarantee with the objective, inter alia, of receiving complaints
relating to claims made in connection with or arising out of personal insurance
contracts with any members and to facilitate the satisfaction, settlement or
withdrawal of such complaints disputes or claims whether by the making of
awards or by such other means as shall seem expedient.

       The Administration has been informed that the ICCB, in adjudicating
claims disputes between a policy holder and the insurer concerned, the Bureau
will consider the relevant policy, general principles of good insurance practices,
any applicable rule of law or judicial authority, and any codes and guidelines
issued from time to time by the Hong Kong Federation of Insurers or the ICCB.
At present, where there is inconsistency between the interpretation of the terms
of the insurance contract and the general principles of good insurance practices,
the Bureau would take a view on which one should prevail. ICCB is now
reviewing the matter with a view to amending its Articles of Association to
specify clearly that in adjudicating complaint cases where there is any such
inconsistency, the general principles of good insurance practices shall prevail.

(b) We have gathered that the ICCB seeks to spell out clearly in its Articles of
Association that decisions of ICCB shall be final and binding on its members.
The ICCB considers that such changes should be able to reduce the chance for
its members to take the bureau's adjudication on insurance compensation claims
made against them to the Court for judicial review.

(c) As explained in the reply to question (a) above, ICCB is a company set up
by the insurance industry voluntarily to assist policy holders in resolving their
claims disputes with insurers in respect of their personal insurance policies.
According to the judgement of the court case mentioned by the Hon Cheung
Man-kwong, the judge considers that the Bureau 'has at all material times
carried out a public function of conciliation and arbitration'. The ICCB is
however not an organization under the regulation of the Government.

(d) The effective operation of the self-regulatory system of the insurance
industry is vital to the protection of policy holders' interests, and that ICCB is
an important part of this self-regulatory system. Hence, the Government
attaches much importance to the operation of the ICCB. We will closely
monitor and review the operations of the ICCB after it has amended its Article
of Association and enhanced the transparency of its operation, to ensure that the
policy holders' interests are duly protected.

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