The Financial Services and the Treasury Bureau has proposed injecting an additional HK$300 million into the Insurance Authority in the next fiscal year, as the regulator is failing to make ends meet, according to deputy secretary Aaron Liu Kong-cheung, Deputy Secretary for Financial Services and the Treasury.
The situation likely to last for years, he added.
The IA had applied for funding in March this year, saying its operating balance would shrink to HK$104.4 million by the end of March next year, leaving it able to cover only three months of operating costs.
IA chief executive Clement Cheung Wan-ching explained that the lack of funds was mainly due to the long time taken for the handover, leading to a delayed collection of insurance premiums, and IA does not expect revenues to increase before 2021. The regulator decided to take responsibility for overseeing the local insurance industry in May but the process of taking over three self-regulatory organizations was only completed by the end of September.
He pointed out that IA's income was primarily from premiums collections in the market, which were highly dependent on market conditions.
Cheung also revealed it recorded a "satisfying" 82,500 Qualifying Deferred Annuity Policy related guarantee slips as of the end of October since the policy launched this April, worth a total of HK$6 billion.
Meanwhile, China's Ministry of Human Resources and Social Security yesterday stipulated on that Hongkongers working, living or studying on the mainland should join the mainland social insurance scheme from January 1, 2019.
But those who can prove that they have had and will keep the insurance plans in Hong Kong can be exempted from contributing to the basic retirement insurance and unemployment insurance in China.