Underwriting Procedures 核保程序

Quotations 報價

A prospective insured or their representative, usually an insurance broker, may ask what terms an insurer might provide without committing to buy insurance. A quotation can be oral or written and may state only the anticipated premium or include cover and other contractual terms.

The label 'quotation' does not determine whether it is an offer capable of acceptance. A court considers the wording, negotiations, parties' intentions and other relevant facts. Acceptance of an offer may create a contract; an invitation to treat requires a subsequent offer and acceptance.

Proposal Forms 投保書

A proposal form supplies information for assessing the risk. For a relatively minor risk, it may be the only practical enquiry tool, allowing the insurer to accept or decline mainly or entirely on the answers.

Answers may reveal matters needing investigation, leading to further questions or enquiries by surveyors and other professionals. Resulting expert reports and supplementary documents should also be treated as part of the proposal, and the proposer should be told this.

Under the treatment described in this section, a basis of contract clause normally makes the accuracy of proposal information an insurance warranty. Even an error concerning a non-material fact is expected to make the contract void from inception. This is stricter than utmost good faith, which requires representations of material facts to be substantially correct.

The completed form should be retained as a lasting record rather than discarded after the policy arrives. The policy may incorporate it into the contract, and some insurers supply a copy with the policy so that the insured can check the information originally provided.

Issue of Cover Notes, Policies and Certificates of 發出暫保單、保險單及保險憑證

A cover note operates as a temporary policy and binds the insurer; cover does not await approval of a proposal form submitted later. It lasts for a stated short period, for example 30 days, during which the policy is normally issued to replace it. Cancellation remains possible under its notice provisions. A motor cover note commonly includes a temporary insurance certificate and can assist with vehicle registration; a bank may also require a fire cover note before advancing a mortgage loan.

The policy is formal written evidence of the insurance contract and normally records the completed underwriting decision. Most general insurance contracts are simple contracts and do not require a written policy to become effective. Its contents are presumed to reflect the parties' intentions, although compelling contrary evidence can challenge this. It may incorporate the proposal and supplementary documents and replaces the cover note.

A certificate's function depends on its context. Travel or marine cargo insurance may use certificates to confirm individual cover under a master policy, normally without issuing a separate individual policy later. Motor insurance is different: its certificate is a document separate from the policy.

For compulsory motor and pleasure vessel insurance, the certificate is the only legally recognised proof to police and others that the required insurance exists, and is normally permanent. It need not summarise cover: a motor certificate cannot distinguish Comprehensive from Act Only cover. Failure to issue a required certificate can be a criminal offence for which both insurer and insured may be prosecuted. The insurer must recover the motor certificate when the policy is cancelled.

Premium 保費

Premium is the consideration payable for the agreed cover. Risk classification places risks in categories with predetermined average rates; risk discrimination adjusts the baseline premium for the individual features of risks within a category. Calculation bases vary between classes, commonly applying a percentage or per mille rate to the sum insured, annual turnover or annual wageroll.

At common law, advance payment is not a condition precedent to cover unless the contract provides otherwise. A valid contract can exist before payment, requiring the insurer to meet valid claims while retaining a separate right to recover the premium. Wording requiring receipt differs from wording accepting that the insured has 'paid or agreed to pay'. The usual life insurance practice of receiving the first premium before cover begins cannot automatically be applied to general insurance.

Whether payment to an intermediary counts as payment to the insurer depends on the authority involved, including whether the insurer authorised receipt. The Insurance Ordinance also makes an insurer vicariously liable for its appointed insurance agent's conduct in prescribed circumstances and prevents exclusion or limitation of that liability.

A clear statement or conduct showing that the insurer will not insist on payment before cover begins may amount to waiver; an established practice of accepting late premiums may be relevant. To rely on estoppel, the insured must show reasonable reliance on the insurer's relevant statement or conduct. Late payment alone does not establish that the requirement has been waived.

Levies on Premiums 保費徵款

Figures here follow the supplied extract; its 1% MIB levy figure was subsequently replaced by an [official IA corrigendum](https://www.ia.org.hk/tc/supervision/reg_ins_intermediaries/files/P2_2022_SN_Chi.pdf). All authorised third party motor insurers must join the MIB and pass motor policy levies to it. Its First Fund Scheme addresses uninsured compulsory death or bodily injury judgment debts not fully paid within 28 days, and judgment awards for compulsory liability arising from terrorism. Its Insolvency Fund Scheme addresses unpaid final claims caused by insurer insolvency. Hit-and-run victims may also receive ex gratia assistance under the First Fund where negligent driving causing injury or death is reasonably certain.

The Employees Compensation Assistance Scheme under the Employees Compensation Assistance Ordinance (Cap. 365) assists injured employees or deceased employees' families unable to obtain work injury compensation and damages from employers or relevant insurers. Its fund receives a 5.8% levy on EC premiums. Insurer insolvency cases are exclusively handled by the Employees Compensation Insurer Insolvency Bureau (ECIIB), whose scheme protects affected policyholders and is funded by insurers' contributions of 2% of gross EC premium income.

The Government also established a HK$10 billion facility for EC terrorism risks to help maintain protection and underwriting capacity. Participation is voluntary, but non-participating insurers wishing to write EC insurance must demonstrate to the IA that alternative cover is available. Participants pay a monthly charge of 3% of the gross premiums of EC policies they underwrite in Hong Kong during that month.

The IA is operationally and financially independent of the Government and insurance industry, financing its operations through income including service fees and premium levies. From 1 January 2018, policyholders of new and in-force life and general insurance policies must pay the levy with premiums through insurers, except for policies exempted by law. The rate rose from 0.04% initially to 0.1% in April 2021, the fourth and final phase, subject to caps. [IA financial arrangements](https://www.ia.org.hk/en/aboutus/role/financial_arrangements.html)