15 July 2022
The Insurance Authority (IA) appointed Mr Derek Lai and Mr Forrest Kam of Deloitte Touche Tohmatsu as Joint and Several Managers (the Managers) under Section 35(2)(b) of the Insurance Ordinance (Cap.41) (the IO) on 7 January 2022 to take full control of the affairs, business and property of Target Insurance Company Limited (Target) and to conduct a comprehensive review of its financial position.
The Managers today (15 July 2022) exercised their power under Schedule 7 to the IO to present a winding-up petition against Target, which is deemed to be insolvent under the IO and the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32).
A spokesperson for the IA said, “Over the past six months, our efforts to recover the funds owed to Target and repeated demands for capital injection from shareholder controllers to meet the minimum solvency margin of the company have not received any positive feedback. Target has violated the statutory regulatory requirements and its assets are insufficient to meet its liabilities. Against this background, it is incumbent upon the Managers to petition for the winding-up of Target.”
Around 30,000 affected policies 1 , mostly motor policies (about 96%), will remain in force until their expiry dates and policy holders may continue to submit their claims in the usual manner. The Motor Insurers’ Bureau of Hong Kong (MIB) and the Employees Compensation Insurer Insolvency Bureau (ECIIB) 2 will take up claims arising from third party motor and employees’ compensation claims (estimated to be about 94% of the insurance liabilities borne by Target). As for the other insurance claims (estimated to be about 6% of the insurance liabilities borne by Target), Target will continue to handle them as permitted under the relevant laws.
Mr Lai stated that, “Based on the current circumstances, a statutory deposit of HK$250 million placed in trust with the IA for Target, together with estimated realisable assets of Target and the two insolvency funds managed by MIB and ECIIB, should be adequate to settle all valid outstanding claims and projected insurance liabilities.”
The IA spokesperson said, “Our focus is to protect the interest of policy holders, maintain market stability and minimise impact to the community. We will actively engage with the Managers, the MIB and the ECIIB to ensure that all insurance claims are handled in a speedy manner.”
The Managers have earlier taken proactive steps to stop renewal of taxi policies expiring from February to August 2022 and have recently extended this arrangement to all policies expiring in or after August 2022. The Central Distribution System set up by the IA has been deployed to facilitate the migration of displaced taxi and public light bus policies to other insurers, while there is ample capacity in the general insurance market to absorb the remaining policies.
Policy holders who would like to obtain further information may refer to the website of the Hong Kong Federation of Insurers. The following hotlines and e-mails are also available:
| General enquiries about the policies issued by Target and related claims | Target |
2926-2926 (9 a.m. to 12 noon and 2 p.m. to 5:30 p.m., Mondays to Fridays except public holidays) |
| Enquiries for the Managers | Managers |
2238-7826 [email protected] (9 a.m. to 12 noon and 2 p.m. to 5:30 p.m., Mondays to Fridays except public holidays) |
|
Enquiries about third-party motor claims |
MIB |
2949-3926
(9 a.m. to 12 noon and 2 p.m. to 5:30 p.m., Mondays to Fridays except public holidays) |
|
Enquiries about employees’ compensation claims |
ECIIB | |
| Enquiries about migration of taxi policies and public light bus policies via the Central Distribution System | IA |
3899-9846 [email protected] (8:45 a.m. to 12:45 p.m. and 1:45 p.m. to 6 p.m., Mondays to Fridays except public holidays) |
Ends
Notes:
1 Based on policies expiring in or after August 2022.
2 According to the agreed mechanism with the Government, the MIB and the ECIIB will handle third party motor claims and employees’ compensation claims which cannot be paid by an insurer due to its insolvency.