Household Insurance _

Document Sample
Household Insurance _ Powered By Docstoc
					be acceptable when it failed to reflect   report. Mr. Leong promised that
my current living standard. I agreed.     he would meet me again
       After concluding all the impor-    when my formal claim
tant inspections, Mr. Leong passed        application and the
on to me a copy of the claim form         related documents
before he left my flat. According to      were ready.
Mr. Leong, he undertook a brief to the
claims department of my insurer on
the extent of water damage and a
recommended claim reserve.
Thereafter, the insurer would expect
from him a comprehensive survey

                 !                                        eçìëÉÜçäÇ=fåëìê~åÅÉ
            !"#                                            General Insurance Coverage
  NK         !=                                            1. Buildings -
            !"#$%&'$()*+!                                       including architects’ and surveyors’ fees
                                                           2. Household contents - including:
  OK         !=        =
                                                                a. accidental damage to household belongings and valuables
       ~K     !"#$!%&'()
                                                                b. accidental damage to the home during interior decoration
       ÄK       !"#$%&'()*+,-
                                                                c. damage to household contents during domestic relocation
       ÅK     !"#$ !%&'()*+,-./0                                d. damage to windows and replacement of locks due to bur-
       ÇK       !"#$%&'()*+,                                      glary or theft
       ÉK     !"#$%                                             e. loss of money due to burglary or theft
  PK         !=                                            3. Public liability - including legal liability in respect of bodily
            !"#$%&'()*+,-."#$/012                               injury or property damage caused to a third party
  QK         !                                             4. Alternative accommodation if the home becomes unin-
            !"#$% &'()*+,&

            !"#                                           General Exclusions
  NK        !"#$%&'(&)                                    1. Wear and tear
  OK        !" #$ %&'()                                   2. Mildew, rot, corrosion, rust and depreciation
  PK        !"#$                                          3. Breakdown or malfunction of electrical appliances
  QK        !"#$%                                         4. Malicious acts committed by the insured
  RK        !"#$ %&'(")*+,-.                              5. Theft whilst the home is unoccupied for a long time
  SK        !                                             6. Fines and penalties
  TK        !"#$%&'($)*+,-./01                            7. Damage due to lack of maintenance of the buildings
  UK        !"#$%&'()*+                                   8. Loss or damage due to war risks or radioactive contamination
  VK        !"#$%&"'()*+,-./$01234 9. Loss of contact lenses, mobile phones, pagers and sports
                                                                equipment while in use

                                                  I forum

Q                                                   A
        !"#$%&'()*+,-.                                       !"#$%&'()**++,-./01&2$%34567,-.89:;<=>
                                                             !        !"         !"#$%&'( )                     *+,-./0123% 45678
In taking out a household insurance policy,          There are many household insurance products available in the market. Some offer separate home
what should a policyholder pay specific atten-       contents and building insurance, while others offer both forms of protection together as a package.
tion to?                                             Some policies may extend the coverage to personal belongings outside home and even domestic
                                                     helpers. So it is wise to carefully check your insurance policy to make sure that it provides the
                                                     protection you require. You should be aware that some items are not covered, such as contact
                                                     lenses, mobile phones and pagers. Moreover, if your home is unoccupied for a certain period of
                                                     time, the loss caused by theft may not be compensated.

       !" #$%&'(")                                         !"#$%&%'()*+,-./01%23456078($9:;3)*<=>"
                                                              !"#$%&'()* +!,-./0
How would household insurance premi-                Generally speaking, there are two bases for calculating insurance premiums. Premium amount
ums be fixed?                                       may be determined on the basis of the sum insured or the home area. The extent of coverage also
                                                    plays an important part in fixing of insurance premiums.

       !"#$%&                !"#                                ! "#          !"# $%&'()*+,-./0123456789:;<
What is the meaning of protection against “pub-     It means a form of protection against legal liability arising from negligence of the insured who has
lic liability” in a household insurance policy?     caused death, bodily injury or property damage to a third party.

       !"#$%&'()*%&+,-                                     !"#$%&'()"*+,-./012345,6"789:;,<=>?@A
        !"#$%&'()                                          !"#$%&'()*+,-./01234)56 789:;<=>?@ABC)
An interior decoration contractor is employed       In general, the insurance protection will not be affected so long as you have notified your insurer of
to carry out renovation for my home. Will the       the impending renovation work. Depending on the scale of renovation, an insurer may request extra
renovation affect the protection provided by my     premiums to reflect the higher risks undertaken.
household insurance policy?

       !"#$%&'(                                            !"#$%&'()*+,-'./0%12$3'./0456789:;<=>?@
How do I file a household insurance claim?          A policyholder should, as soon as possible, give notice to his insurer about occurrence of an
                                                    insured incident. The insurance claimant should subsequently file a claim application with relevant
                                                    proof of loss to the insurer. In case of home burglary or theft, the claimant should also report to the
                                                    police for investigation and record purpose.

       !"#$              !"        !"#$%                  !"   =       !"#$%&'()*+,&-./# 0123456 789:                                                 !"
What is the role of a “loss adjuster” in house-            !"#$%&'()*+,-./01234567
hold insurance?                                     A “loss adjuster” is an independent insurance practitioner. For substantial household insurance
                                                    claims, a loss adjuster will be engaged by the insurer concerned to investigate the cause of accident,
                                                    to assess the extent of loss, and to negotiate with the insured on the claim settlement.

                                       Organization and Management

OQ            !"#$%                 24-hour Telephone Enquiry Hotline
        2867 2565                        o enhance our services to the public, the OCI has, since 18 August, set
              !"#$%&           !U   T    up a 24-hour enquiry hotline — 2867 2565. Through the hotline, members
        NU          ! OQ      !"#   of the public are now able to readily gain access to frequently asked information
     =J=2867 2565          !"#$%&   in Cantonese, Putonghua or English. Accessible information includes contact
       !"# $%&'()              *+   details of the OCI, regulation of insurance intermediaries, enquiries and complaints
       !"#$!%&'()*+,-               relating to insurers, authorization of insurers and our homepage. Staff of the
       !"#$ %&'()*+,-               OCI are also available to instantly handle more complicated enquiries. For the
       !"#$%&'(             )*+,    period from 18 August to 31 October, the OCI handled about 900 enquiries
       !"#$%& '()*$+,               through the hotline.
 U    NU      NM    PN       !"#$
       !      VMM          !"#$%&

       !"#$%&'()*+ ,-
                                    Professional Development and Training of Staff
       !"#$%&'()*+,-.                    he OCI attaches great importance to human resources development. To
       !"#$%&'()*+,&-               T    equip its staff with adequate skills and knowhow for effective supervision
       !"#$%&'()*+%+,               of the insurance industry, the office has established a training committee for
       !"#$%&'()*+              ,   centralizing training plans and implementing training policies. The OCI has
       !"#$%&'"()"*+,               been arranging systematic training programmes which encompass familiarization
       !"#                          visits, guest lectures, local seminars and overseas conferences on a diversity
             !"#$%&'()*+,           of subjects including insurance, accounting & finance, actuarial science, information
       !"#$%&'%()*+,                technology and management.
       OMMM   Q          !"#$%&'        The OCI is committed to constantly updating the requisite knowledge and
      !"#$%&'                !"#$   skills of its staff to maintain their professional competence. Through a newly
       !"#$%&'()*+,-.               launched Continuing Professional Development (“CPD”) Programme, all the
       !"# UM              !"#$%&   Insurance Officer Grade staff are required, with effect from April 2000, to undertake
       !"           !"#$%&'         a minimum of 80 CPD hours in every two financial years. With the implementation
       !"#$%&'()*+,-.               of the CPD Programme, the OCI is confident that its staff are able to discharge their
       !"#$%&'()*+,-.               prudential supervisory duties professionally in the ever-growing sophisticated
       !"#$%                        insurance market.

                               Long Term and General Insurance

                                   !"#$%&'() *+,-                         other insurance transactions in US currency
         !"#$%&'()*+               !"#$%&'()#*+,-                         in a more convenient manner.
         !"#$%&'()*+               !"#$%&'()*+,-.
    !"#$%&!"'())*+                  !"#$%&'()*+,-                         Tertiary Insurance Education
    !"#$%&'()*+,-.                 !"#$%&'()*                       !          n a thriving insurance market,
         !   "#$%&'()*
                                   !       !" ORa
                                                               !"#        I    Hong Kong requires a continuous
                                                                          supply of high-calibre insurance executives.
    !"#$%&'()*+,-.                 !"#$%&'()#$%&*                         Therefore, tertiary insurance education is in
    !"#$%&'()*+,#$                 !"#$% OQ                 !"#$          increasing demand.
                                   !"                                            Currently, apart from the short-
                                    NVVU          !"#$%&'(                term courses offered by the Vocational
                                   !"#               ORa          !"      Training Council and some professional
         !"#$%&'()*+,              !"#$%&'()*+,-.                         bodies, there are a number of
         !"#$%&'()*+,              !"#$%& !'()*+,                         programmes at degree level provided
    !"#$%&'()*+,-                  !"#$%&'(#)*+,-                         by local universities :
                                   !"#$%&'()*)+,-                          =   a Bachelor of Science (Actuarial
         !"#$%&'()*+,              !"#$%&'()*+',$                              Studies) offered by the University of
    !"#$%&'()*+,$-                 !"#$%&'()*+ ,-                              Hong Kong since 1994;
    !"# $%&'                       !"#$%&'"()                              a Bachelor of Business Administration

=   !"NVVQ         !"#$                 !"#$%&'()*+!                           with a minor in Insurance and Pension
             !"                    !"#$%&'()*+,-.                              Management offered by the City
=   !"#$ NVVU        !"#           !"#$%&'()*+,-                               University of Hong Kong since 1998;
     !"#$%&'($%)*)                 !"#$%&'() *+,-                          =   a Bachelor of Business Administration
     !                             !"#$%&'()"*+,-                              with a major in Risk and Insurance
=   !"NVVU         !"#$%&              !"#$%&'() *+                            Management offered by Lingnan
     !"#$% &'&()*+                                                             University since 1998.
                            Harnessing the Benefits of the US
                                                                                 More tertiary educational institutions
    !"#$%&'()*+,-.          Dollar Clearing System
                                                                          are planning insurance-related degree
    !"#$%&'()         *+,         ith a view to further developing        courses. Given the increasing education
    !"#$%         &'()*+,   W     Hong       Kong's      financial        channels for the insurance discipline,
                            infrastructure, Hong Kong Monetar y           it is believed that the professional
                            A u t h o r i t y h a s re c e n t l y been   knowledge of our insurance practitioners
         !"#$%&'()*+        implementing, by phases, the US Dollar        and the image of the insurance industry
         !"#$%&'()*+        Clearing System. When it is fully imple-      will be enhanced.
    !"#$%&'()*+,-.          mented by the end of this year, the clear-
                                                                          Business Consolidation in
    !"#$%&'()*+,-.          ing system will enable banks to offer US
                                                                          General Insurance Market
    !"#$%&'() *+,-          Dollar cheque deposit accounts.
    ! "#$%&'()*+,-               The insuring public may also benefit             he Hong Kong general insurance
    !"#$%&'()*+,-.          from the new system as policyholders may      T       market has been going through a
    !"#$%&'($)              make use of their US Dollar cheques to        process of consolidation along with the
         !"#$%&'()*+,       pay insurance premiums and handle             global frenzy of mergers and acquisitions.

To achieve economy of scale or prepare       i n s u re r s m a y a v a i l t h e m s e l v e s o f   the Gazette and the Press. Policyholders,
for a larger market share, insurers will     section 25D of the Insurance Companies                   as must be individually notified by the
explore opportunities to merge business      Ordinance (“ICO”) which provides an                      insurer concer ned, are entitled to
portfolios belonging to the same group       alternative means to effect a transfer of                make written representations to the
or to acquire businesses from other          business. This section however applies                   Insurance Authority.
insurers. On the other hand, insurers        to general business only. Transfer of                         In considering an application for
who wish to withdraw from the market         long term business is subject to the                     portfolio transfer, the Insurance Authority
will look for prospective buyers to take     provisions of section 24 of the ICO,                     will have regard not only to the proper
over their outstanding claim portfolios.     which requires a court sanction.                         compliance by the applicant with the
     Under common law, an insurer is               Since 1998, the Insurance Authority                notification requirements, but also the
required to obtain the consent of all        has approved over ten applications for                   financial capability of the transferee in
policyholders before that insurer is         portfolio transfer pursuant to section                   accepting the incoming business.
able to transfer its business portfolio      25D of the ICO. Under this alternative,                  The Insurance Authority will ensure
to another insurer. Such process is          an insurer is required to apply to the                   that the interests of policyholders are
generally considered time-consuming,         Insurance Authority with supporting                      properly protected before an approval
expensive and even impracticable in          documents as specified in the                            is given.
certain circumstances. To facilitate         provision. The insurer is also required
portfolio transfer of general business,      to publish a notice of such intention in

                                         Legal and Technical Corner

         !"#$%                                        !"#$%&'()*+,-.                                         !"# $%&'()$%*+
                                                      !"#$%&'()*+,-.                                         !"#$%&'()*+,-.
             !"#$%#&'(                                !"#$%&'()*+,#-                                         !"#$%&'
             !"# RQEOF               !"               !"#$%!&'()*+,-
       !"#"$%&#'OMMM                                                                                         !""#$%&'()*+
                                     V                !"#$%&'"()*&+,
NR        !"#$%&'( U              NN                  !"#$%&'()*+,-.                                        NVVV              !"#$%%&
       !"#                                            !"                                                             !"#$%&'()*
                                                                !"#$%&'()*+                                   !"#$%&'()*+,-
       !"            !"#$                             !"#$%&                        !"#$%                         !"#$%&'()*+,
             !"#             !"#$%                     !"#$%&'                              !"                !"#$%&'()*+,-
        RVEOFE~~F=          !            !                    !"#$%&'()*+                                     !"#       $%&'()*+,
         !"#$                   !"#                   !"#$%&'()$*+                                            !"           !"#$%
       !"#$%              !"#$                                                                                !"#$%&'()#*+,
       !"#$%&' N M              NP                                                                                !"#$%&'()*+,
                                                       !"#$%                                                  !"#$%&'()!*+
       !"#$% OMMN           N    N
                                                               !"#$%&'()*+                                    !"             !""#$%&
           !"#$             !"#$%                              !V                     !"#$                    !"
       !"#$%&'(                      !"               ! "#$%&'()*+                                                 !"#$%&'()$%&
           !"#$%&'()*+,                               !"#$%&'()*$+,-                                         !"#$%& '()*+$$

         !"#$%&'()*+,-.                                of long term business liabilities of an                  nature and may give rise to accumulated
        !"#$                  !"#$%&'                  insurer but also for all actuarial aspects               or catastrophic losses to an insurer in
         !"#$%                   !"#$                  of the financial management of long                      times of severe economic downturn.
         !"#$%&'()*+,-.                                ter m business, including premium                        Hence, an insurer should, in maintaining
         !"#$%&'()*+,-.                                setting, reinsurance arrangements,                       its solvency position under the Insurance
         !"#$%&'()*+,-.                                reser ving, investment policies and                      Companies Ordinance, take special
         !!"#$%!"&'()%*                                repor ting of irregularities to the                      care to provide adequate technical reserves
         !"#                                           regulatory authority.                                    for its mortgage guarantee business.
                !"#$%&'()*+                                  Under the Regulation, the appointed                In order to provide guidance to insurers,
         !"#$%&'()%&*+                                 actuary of a long term business insurer                  the OCI has recently issued the Guidance
         !"#               !"#$                  !     i s re q u i re d t o c o m p l y w i t h P S 1 i n      Note on Reserving for Mortgage Guarantee
                                                       carrying out his duties under the                        Business (“Guidance Note”).
Insurance Advisory Committee                           I n s u r a n c e C o m p a n i e s O rd i n a n c e .         The Guidance Note applies to an
       embers of the Insurance Advisory                The fully fledged appointed actuary                      insurer as well as a reinsurer. It sets
M      Committee have been reappointed                 system, when implemented, will enhance
                                                       the protection of policyholders.
                                                                                                                out the minimum standard expected of
                                                                                                                an insurer in setting aside technical
or appointed under section 54(2) of the
Insurance Companies Ordinance for a                                                                             re s e r v e s f o r m o r t g a g e g u a r a n t e e
                                                       Guidance Note on Application
period of two years from 15 September                                                                           business, in particular the “contingency
                                                       for Authorization to Carry On                            reserve”. The “contingency reserve”,
2000. Relevant notice was published in
                                                       Insurance Business in or from                            specifically required for this type of
the Gazette on 11 August.
                                                       Hong Kong                                                business, aims at providing sufficient
Insurance Companies (Actuaries’                                                                                 financial resources to meet demand
                                                           n order to enhance the transparency
Standards) Regulation
                                                       I   of our authorization requirements                    arising from accumulation of risks in
                                                                                                                times of severe economic downturn.
      nder section 59(2)(aa) of the                    and procedures, the OCI released in
U     Insurance Companies Ordinance,                   September the Guidance Note on                           This practice is generally in line with
                                                                                                                that applicable to mortgage guarantee
the Insurance Authority has made the                   Application for Authorization to Carry On
                                                       Insurance Business in or from Hong                       insurers in Australia and the United
Insurance Companies (Actuaries’
                                                       Kong (“Guidance Note”). The Guidance                     States.
Standards) Regulation ("Regulation") to
                                                       Note provides comprehensive details of                         For monitoring purpose, an insurer
give legal backing to Professional
                                                       the documents and information required                   is required to separately identify the
S t a n d a rd 1 ( “ P S 1 ” ) i s s u e d b y t h e
                                                       from an applicant and the steps to take                  “contingency reserve” either in its
Ac tuarial Society of Hong Kong
                                                       in the application process. A copy of the                Hong Kong General Business Returns
(“ASHK”). The Regulation, gazetted on
                                                       Guidance Note is available at the OCI                    or in a note to its Returns.
13 October, will come into operation on
1 January 2001.                                        or for downloading at our website.
      PS1 was developed by the ASHK
                                                       Guidance Note on Reserving for
in consultation with the Insurance
                                                       Mortgage Guarantee Business
Authority. It sets out clearly the role
and duties that should be assumed by                          ortgage guarantee insurance has
an actuary under a fully fledged                       M      emerged as a new line of business
appointed actuary system. Under                        in Hong Kong since early 1999. Compared
t h i s system, an appointed actuary is                with other types of general insurance
responsible not only for the valuation                 business, it is generally of a longer term