The Office of the Commissioner of Insurance is studying complaints against insurers and agents to find and tackle their root problems.

In the July issue of I Lens, the office's newsletter, Commissioner of Insurance Richard Yuen said it will trace the common causes of the complaints by analysing the trend and nature as well as the distribution of the complaints.

Noting Hong Kong's insurance industry has huge potential, he said the major challenge it faces is how to sustain long-term development.

"The answer lies with the core value of insurance - trust. We must strive to improve customer service, enhance the quality of the agency force, and protect the interests of consumers," he said.

Measures stepped up to protect consumers

The office will step up measures to ensure insurers implement appropriate controlling procedures for the sale of insurance policies to Mainland visitors, enhance the effectiveness of the Customer Protection Declaration Form to protect policyholders' interest against the twisting of policies, and monitor closely any poaching of agents.

"We will not hesitate to take firm action against any such activities if they are found jeopardising the interests of the insuring public," he said.

On the general insurance side, Mr Yuen said it seems the industry has never been able to shrug off the spell of premium volatility.

"It is incumbent on the senior management of general insurers to resist the tendency, or temptation, to price policies without full regard to the 'burning cost' or claims cost, particularly when under pressure to expand market share."

Wide premium fluctuation not in the trade's interest

Mr Yuen said the office has no intention, nor is it permitted by law, to interfere with the pricing of insurance products. However, it has a duty to ensure long-term stability of the industry and protect policyholders.

"Wide fluctuation of premium is certainly not in the interest of policyholders or the industry," he said.

"We are keeping a close watch on the market, especially on the more aggressive players, and will vigorously enforce the solvency and reserve requirements under the law to ensure the relevant insurers have the necessary and appropriate financial resources to assume the risk and liability underlying the business."