On 1 November 2021, the Insurance Authority (“IA”) and the Insurance Complaints Bureau (“ICB”) entered into a memorandum of understanding (“MOU”) aiming to expedite the handling of claim-related disputes; that is, complaints of a monetary nature involving disputes on the decision made by an authorized insurer relating to a claim made under a personal insurance policy.
About the IA
The main function of the IA under section 4A of the Insurance Ordinance (Cap. 41) 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 policy holders. If the IA has reasonable cause to believe that the Insurance Ordinance has been breached, it is empowered to launch an investigation and take appropriate action, such as prosecute or take disciplinary action.
The IA, however, does not have the power to interfere with the commercial decisions of an authorised insurer/a licensed insurance intermediary, nor can it adjudicate disputes between an authorised insurer/a licensed insurance intermediary and its policy holders.
About the ICB
The ICB was set up in January 2018 to replace the Insurance Claims Complaints Bureau (“ICCB”). It provides an alternative dispute resolution mechanism to resolve all types of insurance disputes stemming from personal insurance policies. Apart from maintaining the ICCB’s service of adjudicating claim-related disputes, the ICB’s List of Mediators deal with non-claim related complaints. The ICB’s rulings are binding on those authorized insurers joining its membership.
The MOU
The MOU seeks to fill the gaps arising from the limitations in the powers of the IA. At present, the IA has limited powers to handle complaints which do not involve contravention of the Insurance Ordinance. For example, a commercial dispute between the complainant and the insurer and/or intermediary concerning the non-payment of a claim under an insurance policy.
Thus, the MOU provides a framework for the the IA to refer claim-related complaints to the ICB for adjudication when certain conditions have been met. The conditions are as follows:-
- The claim-related complaint has been submitted to the IA;
- In the IA’s opinion, the complaint may be adjudicated by the ICB in accordance with its terms of reference; and
- The complainant has provided consent for the IA to refer the complaint to the ICB for consideration.
According to Mr. Clement Cheung, Chief Executive Officer of the IA, “Policy holders in dispute of claims settlement made by authorized insurers should be able to access free advice and impartial support… The signing of this MoU is a positive step towards ensuring that the interests of policy holders are safeguarded in an optimal manner”.
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