Independent non executive directors the case for hong kong insurers
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Office of the Commissioner of Insurance The Government of the Hong Kong Special Administrative Region http://www.info.gov.hk/oci/. Independent Non-Executive Directors –The Case for Hong Kong Insurers. Mr. Richard Yuen Commissioner of Insurance. Introduction.

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Independent Non-Executive Directors –The Case for Hong Kong Insurers

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Independent non executive directors the case for hong kong insurers

Office of the Commissioner of InsuranceThe Government of the Hong Kong Special Administrative Regionhttp://www.info.gov.hk/oci/

Independent Non-Executive Directors –The Case for Hong Kong Insurers

Mr. Richard YuenCommissioner of Insurance


Introduction

Introduction

  • Corporate governance recognized internationally

  • Standards issued by insurance regulators


Introduction cont d

Introduction (cont’d)

  • Guidance Note on the Corporate Governance of Authorized Insurers

    • Promulgated by theInsurance Authority (IA)in August 2002

    • Effective date: 1 September 2003

    • Requires appointment of INEDs


Importance of independent non executive directors ineds

Importance of Independent Non-Executive Directors (INEDs)

  • Provide independent and objective opinions

  • Assist the Board to make sound decisions

  • Help maintain appropriate checks and balances


Requirements about ineds

Requirements about INEDs

  • INEDs not less than one-fifth of the Board

  • INEDs must be fit and proper persons

  • INEDs should be individuals with sufficient calibre and breadth of experience


Requirements about ineds cont d

Requirements about INEDs (cont’d)

  • INEDs should be free from any business or other relationships with the authorized insurer

  • At least one INED in the Audit Committee


Requirements about ineds cont d1

Requirements about INEDs (cont’d)

  • Circumstances in which a director is unlikely to be considered an INED:

    • Employee

    • Director of a company within the same group

    • Controller

    • Associate of director or controller

    • Person having significant financial association with the insurer


Compliance status

Compliance Status

  • Authorized insurers in Hong Kong generally comply with the INED requirements

Survey on Corporate Governance in Sept 2003

At least one-fifth of the Board composed of INEDs

Authorized Insurers

Non-compliance


Background of ineds

Background of INEDs


Continuous professional development

Continuous Professional Development

  • Directors and INEDs to receive training

  • INEDs to make reference to relevant guidelines


International association of insurance supervisors iais missions

International Association of Insurance Supervisors (IAIS) - Missions

  • Enhance cooperation among insurance supervisors

  • Unite their efforts to develop practical standards

  • Provide assistance to safeguard the integrity of markets

  • Exchange information


Iais key activities setting global insurance standards

IAIS - Key Activities: Setting Global Insurance Standards

  • Capital adequacy and solvency

  • Accounting

  • Reinsurance

  • Transparency and disclosure


Iais observer members

IAIS – Observer Members

  • Exist since 1999

  • Insurance professionals

  • > 80 Observers

  • Receive draft IAIS standards and training materials for comment

  • Take part in IAIS working parties


Independent non executive directors the case for hong kong insurers

International Association of Insurance Supervisors (IAIS)

http://www.iaisweb.org


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