HONG KONG SAR, CHINA Law and Practice Contributed by: Edwin Northover, Jan Buschmann and Tony Dymond, Debevoise & Plimpton
10. Insurtech 10.1 Insurtech Developments
Panel and non-claim-related complaints by way of mediation provided by the ICB List of Mediators. • Adjudication involves an independent adjudica- tor (usually an expert) who considers the claims of both parties and issues a binding decision. • Mediation is a voluntary procedure whereby a professionally trained and impartial mediator helps the parties settle their dispute. A mediator will not decide for the parties but will assist the parties in exploring the merits of their own cases, as well as in identifying possible solutions in order to facilitate settlement. Policyholders are not bound to refer their disputes to the ICB. If they choose to litigate or arbitrate their case instead, the ICB does not have jurisdiction unless and until those proceedings are resolved. The ICB has no jurisdiction to handle disputes arising from industrial, commercial or third-party insurance. Reinsurance Contracts Reinsurance contracts often contain arbitration clauses, and it is common to arbitrate reinsurance- related disputes (see 9.5 Enforcement of Arbitration Clauses ). 9.8 Penalties for Late Payment of Claims Subject to general contractual obligations between the insurer and the insured under an insurance policy, and unlike in the United Kingdom, there is currently no provision in Hong Kong that confers a statutory right of damages if insurers delay payment of claims. How- ever, where litigation or arbitration is commenced to enforce payment, the court or tribunal has discretion to award interest on the sum found to be due. 9.9 Insurers’ Rights of Subrogation Where the insurer pays a claim under an insurance contract, the insurer is subrogated to the rights of the insured relating to the subject matter of the claim. The insurer becomes entitled to enforce all rights of the insured against third parties who were liable to the insured for the covered loss.
Insurtech developments in Hong Kong are similar to those in other jurisdictions. For example, online onboarding, sales, policy administration and claims portals, digitally customisable products, online bro- kers (such as comparison websites), blockchain- based products, use of artificial intelligence and products involving connected devices are all seen in the market. There is great interest in insurtech solu- tions, including those developed in nearby markets with strong insurtech ecosystems, such as Mainland China and Singapore. A number of purely digital life and general insurers have been authorised by the IA. 10.2 Regulatory Response The IA has two primary initiatives in relation to One initiative is a “fast track” authorisation process for purely digital insurers, which has been used by a number of new entrants to the life and general insur- ance markets. Such “fast track” insurers are generally limited to distributing their products through their digi- tal platform and are not permitted to sell them through traditional agent or broker channels. Sandbox insurtech. Fast Track The other initiative is a “sandbox”, which allows insur- ers to work on insurtech applications and products with the IA before they are launched to the market. Since the launch of the sandbox, this has included online sales platforms and non-face-to-face sale models involving videoconferencing tools. Certain requirements apply to participation in the sandbox, including: • a reasonably mature insurtech application; • solid testing; • exit and customer protection measures; and • the compliance of the application with law and regulation.
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