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Frequently Asked Questions on Amendment for Personal Information Collection Statement & the Ordinance of Commission Disclosure by Brokers

Frequently Asked Questions - Amendment for Personal Information Collection Statement

1. What is personal data?
Personal data is any piece of information including expressions of opinion, relating to a living individual from which his identity can be ascertained.

Examples of personal data used in everyday life include a person's name, telephone number, fax number, address, sex, age, occupation, marital status, salary and financial status, religious belief, nationality, photo, identity card number, medical records and employment records, including assessments of employment performance.

2. What is the major amendment on a Personal Information Collection Statement under the Personal Data (Privacy) Ordinance (“Ordinance”)?
The major amendment under the revised Ordinance focus mainly on the use of personal data in direct marketing.

There are two sets of new rules under the Ordinance:
a. Use of personal data for direct marketing; and
b. Provision of personal data to a third party for the purposes of direct marketing

When using personal data for direct marketing purposes for the first time, you must get the consent of the customer and inform them that they may access and correct their personal data or request you to stop using their personal data for this purpose at no cost. Then you must stop using their personal data once requested to do so by the customer.

3. What are the specific actions that need to be taken before using personal data in direct marketing?
a. For the “Use of personal data for direct marketing”:

Before using personal data for direct marketing purposes, you must inform customers that you intend to use their personal data, and provide them with details of (i) the type of data being collected and (ii) the classes of marketing subjects. The details should be easily readable and understandable.

Customers may express their consent through the channel provided by you in which the consent can be an “indication of no objection” to use their personal data, therefore an “opt out” is acceptable.


b. For “Provision of personal data to a third party for the purposes of direct marketing”:

Before transferring personal data to a third party, you must inform customers that their personal data will be transferred to a third party for direct marketing purpose (for gain, if applicable) by written notice including type of data being transferred, classes of persons to which data will be provided and classes of marketing subjects.

You must provide a channel for customers to express their consent for transferring their personal data by allowing them to show “indication of no objection”.

4. Is it mandatory to provide a tick box for customers to indicate their objection? Is it allowable to advise them to communicate their consent to us by sending an email instead?
The notification must be presented in a manner that is easily understandable and in written form, which is easily readable.
Therefore, it is recommended to provide a tick box for customers to indicate their objection.

5. With an online purchase platform, can the PICS statement be presented to customers by use of a pop-up window?
Yes, as long as the PICS statement is presented to customers in an easily understandable and readable format.

6. What is a data processor?
A data processor is a person who processes personal data not for his own purposes but on behalf of another person. For example, an SMS service provider who sends an SMS containing travel policy details to a policyholder on behalf of MSIG.

7. Does a data processor need to get the consent of customers before contacting them on behalf of another person?
No, he does not.

8. If an agent is collecting personal information from a potential customer for a price quotation but has not decided which insurance company to refer to, does the agent need to present the PICS to this potential customer? If yes, what version of the PICS should the agent present?
If the agent intends to use the personal data of the customer for direct marketing purposes, he needs to present the PICS to the customer before / at the time of collecting of his/her personal data.


9. According to the grandfather exception, the new rule does not apply to personal data which is used before 1 April 2013. What happens in the event that an eDM has been sent to a customer before 1 April 2013 but failed to reach the customer and bounced back? Does the grandfather exception apply to this personal data?
No. As the eDM did not reach the customer successfully before 1 April 2013, the grandfather exception does not apply to this personal data. You must get his consent before using direct marketing to contact him under the new rule.

10. If I get the consent of a customer to use direct marketing before the effective date, and then the customer’s address changes and is updated, can I still use the new address for direct marketing without notifying the customer?
Yes, you may use direct marketing to contact this customer as long as you have got his consent before the effective date of the new rule and he has not withdrawn his consent for direct marketing.

11. If I have sent a letter/email to a customer notifying them or to obtain their consent, but no feedback is received from the customer, does it mean I can use their data for direct marketing purposes?
No, you can only do so when you have received their explicit consent for direct marketing.

12. If a customer applies for a credit card from a bank and has given consent to the bank to use his personal data for direct marketing purposes, does the bank need to seek the consent of that customer to transfer data to its associate company (insurance company) for direct marketing of its insurance products?
Yes, new consent has to be obtained if the bank later intends to transfer the customer’s personal data to the bank’s associate company (insurance company) for the latter’s direct marketing of its products.


13. If I get the consent of a customer to use direct marketing before the effective date, and then the customer’s address changes and is updated, can I still use the new address for direct marketing without notifying the customer?
Yes, you may use direct marketing to contact this customer as long as you have got his consent before the effective date of the new rule and he has not withdrawn his consent for direct marketing.

14. If I have sent a letter/email to a customer notifying them or to obtain their consent, but no feedback is received from the customer, does it mean I can use their data for direct marketing purposes?
No, you can only do so when you have received their explicit consent for direct marketing.

15. If a customer applies for a credit card from a bank and has given consent to the bank to use his personal data for direct marketing purposes, does the bank need to seek the consent of that customer to transfer data to its associate company (insurance company) for direct marketing of its insurance products?
Yes, new consent has to be obtained if the bank later intends to transfer the customer’s personal data to the bank’s associate company (insurance company) for the latter’s direct marketing of its products.

16. Can customers withdraw their consent?
Yes, customers may request to opt out of your use of their personal data any time. You must stop using the data for direct marketing purposes and notify any person to whom data has been provided to stop using the data for direct marketing purposes once you receive the customer’s request.

17. What are the penalties for breaching the Ordinance?
For breaching the Ordinance with regard to using personal data for direct marketing purposes maximum penalty is HK$500,000 and 3 years imprisonment.

For breaching the Ordinance with regard to providing personal data to a third party for the purposes of direct marketing for gain the maximum penalty is HK$1,000,000 and 5 years imprisonment. If not for gain, the maximum penalty is HK$500,000 and 3 years imprisonment.

18. When does the Ordinance come into force?
The Ordinance is effective starting from 1 April 2013. Starting from 1 April 2013, all policy transactions will be bound by the Ordinance.

19. Will MSIG provide new application/ proposal forms together with new PICS that are compliant with the Ordinance?
Yes, following the guidance recently released by the HKFI, we have prepared an interim version of the PICS in loose sheets to supersede the PICS originally printed on the application/ proposal forms.

Please remember to present these loose sheets to your customers together with proposal forms. MSIG will incorporate the finalised PICS into the application/ proposal forms soon. You will be notified when the new combined forms are available.

For more detailed information, please refer to the relevant guidelines by visiting the website of the Office of the Privacy Commission for Personal Data, Hong Kong (http://www.pcpd.org.hk).

 

 

Frequently Asked Questions for the Ordinance of Commission Disclosure by Brokers

1. What is the purpose of broker commission disclosure under the Prevention of Bribery Ordinance?
Brokers represent their customers in choosing an appropriate insurance product to meet their customers’ needs. For this service, brokers often receive commission from insurers. This creates a potential conflict of interest where the broker is working for the customer but is remunerated by the insurer and may contravene the Prevention of Bribery Ordinance. As such, it is essential for policyholders to be informed about this situation to allow them to make an informed decision or ask for further details of the remuneration.

2. Why are insurance agents not required to disclose their commissions to the policyholder?
Since insurance agents are not acting on behalf of policyholders, there is no principal-agent relationship between insurance agents and policyholders.

3. What are the specific actions that need to be taken in order to comply with this ordinance?
When a customer proceeds to apply for an insurance plan, the broker must get this customer’s consent about his acknowledgement of the commission arrangement between the broker and the insurer.

To facilitate our intermediary partners compliance with such rule, MSIG has prepared 2 versions of proposal forms ([a] Agent & Direct version, and [b] Broker version). The commission disclosure declaration statement is only incorporated in the broker version.

4. Apart from the proposal form, are there any other materials which need to include the commission disclosure declaration statement for customer’s consent?
Besides the proposal form, the commission disclosure declaration statement is also added to our online purchase platform and other business correspondence such as the premium debit note if no formal insurance proposals or quotations are provided.

MSIG also attaches this statement to the expiry notice to ensure that customers renewing their policies will also be notified about the revised ordinance.

5. What happens if a broker does not get a customer’s consent to receive commission upon purchase?
Without the customer’s consent on the broker commission, we cannot proceed with the insurance application.

6. When will the Ordinance come into force?
The ordinance is in force from 15 April 2013. All policies transacted starting from 15 April 2013 must be compliant with the Ordinance.

7. Do I need to disclose the rate or amount of commission I receive to the customer?
Yes, if the customer requests specific and detailed information and / or wishes to benchmark the commission payable with normal market rates.

8. Should the broker’s declaration be made for all policies solicited by the broker?
Yes, the declaration must be made for all policies solicited by the broker, regardless of the policy size.

9. How should this requirement be fulfilled if a customer purchases the insurance product through the broker’s website?
The declaration should appear on the entrance webpage of the online application section. Customers are required to tick a box after reading and agreeing to the commission disclosure declaration before they are allowed to proceed with the rest of the application.

 
        
   
 
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