Year 2011 - Bancassurance – my perspective 銀行保險 我知我見

From the page 20 of the Consultation Paper (on Proposed Establishment of an Independent Insurance Authority) released in July 2010, it was known to the Insurance Authority that there are 26.4% of the total insurance intermediaries (18,000 out of the total of 68,000) are bank employees involving the sales of the insurance products. It was further stated that more than 30% of insurance products sold in Hong Kong are distributed through the Banks. AS such the situation is not so ‘sweet’ in Hong Kong. In some countries it is understood that their Insurance Authority or Regulators would not allow the Banks to sell insurance at their retail level or at their branches. The reason is so obvious. Further it is also their law to prohibit “Tied Selling” by the Banks and its agents. “Tied Selling” is defined very clearly that when a person doing a transaction (e.g. mortgage application) with the Banks or Financial Institution, is required to transact additional business (e.g. insurances) with the Banks or its agents. The purpose is simple-----just to protect the members of the public. There are also some restrictions under the law to own Insurance companies by the Banks. Nonetheless in Hong Kong we have too little defensive tools to protect the insuring public and the Government Authority are too…………………… We all know in our industry the Agents are representing the Insurers and the Brokers are representing the Customers (ie the insuring public). BUT The Agents in the Banks are representing both the Insurers and THEIR BANKS . The worst is that the Bank staff would NOT properly disclose the fact that the insurances so arranged would only protect their Bank’s interest, not the policyholders’. Eric K Chui Mr. Chui graduated from the University of Hong Kong specialized in Civil Engineering in 1974 and has engaged in Insurance since then and was awarded as one of the selected Outstanding Businessmen in WHO’S WHO by the International Business Edition in Hong Kong in 1986. His professional life is further augmented through his active participation in other community services in both Hong Kong & Vancouver, Canada. 13