Friday, November 27, 2015   

High-risk workers could get better insurance

Matthew Lee

Friday, May 20, 2005

Employers unable to insure their staff can resort to a residual scheme proposed by the insurance sector and favored by the government, legislators were told Thursday.

Currently, all employers are required by law to insure their staff against accidents in the workplace.

However, some high-risk sectors find it difficult to get insurance for certain types of workers, as was the case with medical workers in 2003 following the SARS outbreak. Other high-risk occupations include divers or construction personnel working at heights.

The two proposals being considered are the central employees' compensation insurance scheme and the residual market mechanism.


The central scheme will be provided by the government, while the residual scheme will be provided by the insurance sector. Both schemes will insure employers who are unable to buy insurance for their staff.

Under the residual scheme, the Federation of Insurers will help high-risk employers find insurance coverage if they have been refused by at least three firms. If that fails, the employers will be jointly insured by members of the federation.

Although pledging that the government will not shelve the central scheme that is favored by unionist legislators, Permanent Secretary for Economic Development and Labour Matthew Cheung told the Legislative Council's manpower panel he is leaning towards allowing the insurance sector to take up the responsibility.

"The insurance sector is very cooperative, I am glad that they are willing to discuss the scheme with the labor sector," Cheung said.

"The residual scheme is constructive and is worth a shot. The government has promised to continue studying the feasibility of the central scheme, but we have not decided whether to implement such a scheme."

He urged the public to allow at least one year for the insurance sector to prove whether the residual scheme works.

Compared with employee insurance programs in Canada, the United States and Australia, Cheung said a central scheme would set a maximum amount of compensation for employees and would cost 50 percent to 220 percent more in premiums for companies than a residual scheme.

"The government will uphold the requirements of three As and one T in gauging the efficiency of the residual scheme," he said. The three As are availability, accessibility and affordability of insurance, and the T is the transparency on how premiums are set.

Both Commissioner of Insurance Richard Yuen, who regulates the industry, and insurance sector legislator Bernard Chan support the residual scheme because more than 10,000 insurance workers could lose their jobs if the government were to provide a central scheme.

"The free market mechanism is what makes Hong Kong successful," Yuen said. "Around 70 insurance firms are providing insurance coverage for employees. Any change could have an enormous impact on the market."

In recent months, hospitals have had their backs to the wall after insurance firms refused to insure medical staff who, it was felt, were more likely to be infected with infectious diseases.

The Federation of Insurers, a self- regulatory body of about 130 insurance firms, has identified 22 high-risk groups, and details of the residual scheme will be hammered out after discussions with the labor sector and after premium calculations are completed.

Federation representative Chan Kin- por said they could start the scheme as soon as the first quarter of next year.

He stressed that a central scheme may not be in the best interests of employers and employees as compensation for employees may lessen while premiums for employers could rise.

However, panel members blasted the government for shedding its social responsibility to provide last-resort insurance for high risk groups.

Medical sector legislator Kwok Ka- ki said the central scheme in other countries also looked at ways to prevent injury and death, as well as providing services for the rehabilitation of injured employees.

"That is why the central scheme costs more," he said.

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