Insurance Authority introduces temporary facilitative measures to reduce the risk of virus infection in the selling process of selected insurance products
21 February 2020
In view of the recent novel coronavirus outbreak, the Insurance Authority (IA) announced today (21 February 2020) a set of temporary facilitative measures1 to reduce the risk of infection from face-to-face meetings between intermediaries and their clients.
These temporary facilitative measures cover only Qualifying Deferred Annuity Policy and Voluntary Health Insurance Scheme products which are eligible for tax deduction in the 2019–20 assessment year. With immediate effect, insurers and intermediaries may dispense with the need to conduct a Financial Needs Analysis in the selling process of these products, provided that they have duly performed upfront disclosure2 of important information with their clients and applied an extended cooling-off period that lasts no less than 30 calendar days for the delivery of policy documents through the mail and for policy holders to seek professional advice if found necessary. Furthermore, insurers and intermediaries must continue to adhere strictly to the principle of fair treatment of customers. The measures will last until end of the current tax assessment year, which falls on 31 March 2020.
“The insurance industry is facing daunting challenges amidst the novel coronavirus outbreak. Against this backdrop, the temporary facilitative measures are aimed at enabling potential policy holders to purchase selected products eligible for tax deduction from their insurance intermediaries without attending face-to-face meetings as normally required. The IA has also been collaborating with the industry to provide essential relief measures for the insuring public during this challenging period,” said Dr Moses Cheng, Chairman of the IA.
Specifically, the relief measures for targeted policy holders rolled out by individual insurers include extended grace period of premium payments of up to 180 days; expanded medical coverage and relaxed hospital restrictions; simplified and expedited claim procedures; hospital cash benefit, death benefit and other concessionary benefits.
“The IA welcomes these initiatives and encourages more insurers to make similar efforts to provide timely support to their clients, thus realising the risk-mitigating role played by the industry,” Dr Cheng said.
The IA will maintain close dialogue with industry stakeholders and the relevant regulators to explore other similar measures that could allow potential policy holders to acquire products that suit their needs with greater ease while ensuring that their interests are properly protected.
1The introduction of temporary facilitative measures was communicated to authorized life insurers via a circular issued by the IA on 21 February 2020.
2The upfront disclosure should include, where applicable, objective(s); the type and nature of the policy; the target benefit period; the payment period; the level of premiums payable; prominent warning to the client concerning the affordability of the policy during the entire premium payment period; relevant information highlighting the liquidity risk associated with the product, etc.