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Consumer Protection > Insurance Market Arrangements

Insurance Market Arrangements

To better protect the interests of the insuring public, the following major insurance market arrangements are in place, providing safety nets to policy holders:

Motor Insurers' Bureau of Hong Kong

The Motor Insurers' Bureau of Hong Kong (“MIB”) administers two funds, namely the First Fund and the Insolvency Fund. The First Fund provides relief to a third party traffic accident victim (or his/her dependants) who suffers bodily injury or death but is unable to obtain compensation because the driver is uninsured or untraceable. As a result of the legislative changes in 1995 whereby insurance policies are allowed to set a limit on third party liabilities, the coverage of the First Fund is extended to include that part of the awards to traffic accident victims which exceeds the policy limit. The Insolvency Fund compensates a third party claimant whose claims for bodily injury, death or property damage resulting from a traffic accident remains unsettled due to the insolvency of the insurer concerned.

The two funds are financed by levies on motor insurance premiums. All insurers authorized to carry on direct motor vehicle liability insurance in Hong Kong are required to be members of the MIB.

Employees Compensation Insurer Insolvency Scheme

The Employees Compensation Insurer Insolvency Scheme (“ECIIS”) came into operation on 1 April 2004 to take over the function of the Employees Compensation Assistance Scheme in providing employees compensation (“EC”) in the event of insolvency of an employer’s insurer which happens on or after that date. All insurers carrying on direct EC business must be members of the Employees Compensation Insurer Insolvency Bureau (“ECIIB”), the Bureau is set up for administering the scheme. The ECIIS is funded by a contribution from member insurers at a rate of their gross EC premiums.