The Hong Kong Federation of Insurers (HKFI) today (29 June 2009) affirmed its full support for the setting up of a Policyholders' Protection Fund (PPF) in the light of the impending discussion by the Legislative Council’s Panel on Financial Affairs on this subject.

"Our industry fully supports the establishment of the proposed PPF.  Together with the strong surplus capital requirements in Hong Kong, the PPF will give policyholders additional confidence in the collective ability of the industry to meet claims", said Mr James Wong, Chairman of the HKFI.

The information from the HKFI shows that at present about 90% of the life insurance policies have a face amount of less than HK$1 million.  And for general insurance policies of personal lines, over 90% have a similar face amount.  These policyholders, subject to verification by a more in-depth actuarial study, will be fully covered under the proposed compensation limits.

Details of the target fund size, the optimal levy rate, administrative structure of the fund, etc have yet to be worked out.  We at the HKFI will continue to work closely with the Insurance Authority on these areas to come up with a suitable and practical PPF in line with public expectations.