MR CHAN KIN-POR (in Cantonese): Ms Cyd HO has proposed several amendments which seek to deduct the $450 million for the establishment of the Independent Insurance Authority (IIA), the $1 million for the exit package for the Insurance Officers, and the $21.7 million for the Pilot Programme to Enhance Talent Training for the Insurance Sector and Asset and Wealth Management Sector (Pilot Programme). As the representative of the insurance sector, I oppose these amendments. I will explain the importance and urgency of establishing the IIA and launching the Pilot Programme to the development of the industry.
All the three items are new initiatives. Some Members think that the Government’s arrangement of putting them before the Legislative Council together with the Appropriation Bill 2016 is a move that bypasses the Finance Committee and denies Members of the opportunity for scrutiny. I wish Members can understand that these three items, which do not have much direct impact on people’s livelihood, were once put on the queue of items waiting for inclusion in the agenda of the Finance Committee, but the wait has been in vain. Owing to the urgent need for their implementation, there is no alternative but to put them before the Council together with the Budget. Otherwise, their implementation will be delayed indefinitely. Although this arrangement is not satisfactory, it is far better than putting these three items indefinitely at the end of the waiting queue. Actually, as the Chairman of the Finance Committee, I have repeatedly reminded its members that if they continue to filibuster, it will not be possible to have any timely scrutiny of many items. I have explained that in order to avoid delay, the Government will put forward these items together with the Budget, in which case the Finance Committee will lose the opportunity of scrutinizing them. Thus, Members have long since been aware of this Government action today, and they all understand that this is the side effect of filibustering.
The Bill for the establishment of the IIA was passed by the Legislative Council last year and the Government immediately started working on its establishment. The plan is for the IIA to take over the statutory functions of the Office of the Commissioner of Insurance (OCI) by the end of this year, and to take over the supervision of insurance intermediaries in two to three years. The Government has appointed the Chairman and seven Non-Executive Directors of the IIA and established a preparatory working group responsible for staff recruitment, formulation of internal regime, office accommodation and procurement.
All such work has not yet started because it is necessary to wait for funding approval by the Legislative Council. Under the plan, the IIA should begin operation within this year but up till now, it still does not have an office and staff recruitment has not started. Even if funding approval is given this month, there are only six months left. It is very doubtful if the IIA can take over by the end of this year as scheduled. If funding is not approved, it will be even more disastrous.
The Government has said that in case funding cannot be approved as scheduled, the OCI will continue its operation. In fact, although the OCI is still in operation, it has already entered the stage of pre-dissolution preparations. Its staff are awaiting departure or transfer. Although I have faith in their professionalism, I must still say that the entire office is already like the setting sun. If the IIA cannot be established soon, there will be serious impact on the work of supervision.
Actually, our passage of the Bill last year was preceded by thorough discussion on the workings of the IIA. We were also aware that the IIA would need government funding in its initial days and would become self-financing thereafter. Regarding the financial arrangement proposed by the Bureau, there were also in-depth discussions. Therefore, in my opinion, it is not correct to say that there has been insufficient time for the Legislative Council to discuss the issue throughout the process of enacting the Bill and seeking funding approval. Quite the contrary, our passage of the Bill on the establishment of the IIA should in principle imply our approval of the financial arrangements for the IIA.
The insurance sector has high expectations of the IIA. The sector hopes that the IIA can better protect policy holders and boost public confidence in the sector. In addition, the IIA will have new functions, including facilitating the sustainable development of the insurance market and enhancing the competitiveness of the sector in international markets. In other words, the IIA will take part in taking forward the sector’s development and enhancing the sector’s competitiveness. In the past, government efforts in this regard were very limited. The sector hopes that with the impetus from the IIA, it can expand its market opportunities.
There have been studies showing that Hong Kong as an international financial centre has been surpassed by Singapore. We have dropped out of the top three spots. It is imperative that we boost the competitiveness of the financial services industry (including the insurance industry) as quickly as possible to ensure that our status as a financial centre can be maintained. Therefore, the insurance industry has great expectations of the IIA and wishes that it can be established soon.
Furthermore, there is an amendment seeking to deduct the $1 million for the exit package for the Insurance Officer grade. I think Insurance Officers have always been dedicated and have made a lot of contributions. I have to express my heartfelt gratitude to them. Now, they are forced to retire because the grade has to be scrapped; they should be given ex-gratia compensation under the conditions set by the Government. This is only fair and I really see no reason for the deduction. Thus, I absolutely oppose this amendment.
Finally, I would like to discuss the amendment seeking to deduct the $21.7 million for the Pilot Programme. The Pilot Programme was already put forward as early as 2014, but no funding application has been made until now. It is expected to be launched in the latter half of this year and will run for three years. The Pilot Programme includes talent training for the insurance and wealth management sectors. I will focus my discussion on issues involving the insurance sector.
In recent years, Hong Kong’s insurance industry has been developing well but there is always a lack of professional talents, especially in the area of general insurance business. Let me take marine insurance and cargo insurance as an example. It is very difficult to attract young people to join as a lot of professional knowledge is required and it takes them a long time to get familiar with the business. Moreover, the industry also faces a serious shortage of professional talents in the areas of underwriting, claims management, compliance and policy operation. All these are highly professional areas. They offer good salaries and prospects but are always short of manpower. At present, young people in Hong Kong have very few opportunities for career advancement. It is also not easy for them to get a good job. Therefore, through the Pilot Programme, the Government can encourage young people to join the industry. This can address the industry’s problem of having insufficient talents and can give it more room to develop. Also, quality job openings will be made available for young people. In my opinion, the Government is too late in rolling out such a good programme. I cannot see why it has to be delayed. So, I hope Members will oppose all the amendments.