Use of Mediation

[Audio] Smart & Ethical Insurance Solutions 智能且合乎道德的保險解決方案 Using Mediation to Handle Insurance Disputes Effectively 有效地运用调解处理保险纠纷 https://mcuinstitute.com/.

[Audio] 2 Agenda 01 What is mediation How to deal with parties with insurance dispute in mediation 05 Concepts of Insurance Dispute Type, parties, reasons, cases 02 Case study 06 03 Difference of general mediation & insurance mediation Q & A 07 Effectiveness of using mediation to deal with insurance dispute 04 https://mcuinstitute.com/.

[Audio] 3 Part 01 What is mediation ? https://mcuinstitute.com/.

[Audio] 4 What is mediation? Mediation is a process in which a neutral third party (the mediator) facilitates open and constructive discussion between the parties to a dispute. The mediator does not offer advice or act as a decision-maker. Instead, the mediator guides the parties to come up with their own solutions to the problem. https://mcuinstitute.com/.

[Audio] 5 What is mediation? https://mcuinstitute.com/.

[Audio] 6 Why mediate? Quite often, parties to a contract (such as a partnership agreement, or shareholders agreement), will nominate mediation as a method to resolve disputes. Even if there is no written agreement, people who are in business together, or in any kind of dispute (including financial disputes), can agree to nominate a mediator to assist them to resolve the dispute as an alternative to the court process. https://mcuinstitute.com/.

[Audio] 7 Why mediate? Mediation allows a much wider range of outcomes than traditional court claims. In court only one party can "win" but, in mediation, the parties are encouraged to think creatively to come up with an outcome in which, potentially, both parties can win. https://mcuinstitute.com/.

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[Audio] 10 Part 02 Concepts of Insurance Dispute https://mcuinstitute.com/.

[Audio] 11 Insurance Dispute Insurance disputes refer to disputes between Insurance institutions and citizens, legal persons and other organizations Increasing variety of Insurance products due to the rapid development of the Insurance industry The scope of Insurance disputes is very wide Simple disputes and complex disputes coexist in Insurance disputes https://mcuinstitute.com/.

[Audio] 12 Insurance Dispute - Types https://mcuinstitute.com/.

[Audio] 13 Insurance Dispute - Parties Individual VS Insurance institution Company VS Insurance institution Insurance institution VS Insurance institution Other organizations VS Insurance institution https://mcuinstitute.com/.

[Audio] 14 Insurance Dispute - Reasons Lack of communication between did not carefully review the contract two parties lack relevant knowledge Insufficient information / wrong data Inexperience / lack professional ethics different expectation https://mcuinstitute.com/.

[Audio] 15 https://mcuinstitute.com/ Source: ICB Annual Report 2024-25 Annual Report.

[Audio] 16 Insurance Dispute - Real Cases 東張西望｜患癌病人續保遭遞增保費及醫療費自負額苦主報東張提醒保險魔鬼細節 https://www.youtube.com/watch?v=1pIKjgV9ubU https://mcuinstitute.com/.

[Audio] 17 Insurance Dispute - Real Cases 東張西望｜患癌病人續保遭遞增保費及醫療費自負額苦主報東張提醒保險魔鬼細節 Disputes over amount indemnity Insurance company claimed that the treatment fees are not radical Disputes over insurance renewals significantly increased premiums and higher out-of-pocket medical expenses. Insurers often raise renewal costs annually, sometimes by 20%, and impose new clauses requiring patients to pay a portion of their medical bills. These changes create financial burdens for patients who need ongoing treatment. The disputes arise from insurance companies altering terms and increasing costs after diagnosis, which patients argue is unfair and reduces their ability to afford care. https://mcuinstitute.com/.

[Audio] 18 Part 03 Insurance Disputes and Governance https://mcuinstitute.com/.

[Audio] 19 Difference between ordinary dispute and insurance dispute Ordinary dispute Insurance dispute Monetary or non-monetary Monetary No customer relationship Is (or was) a client / partners / relationship of the relevant institution No financial service Received Insurance / services from relevant institutions Simple or complex The technical, factual and legal issues involved are very complex Related to agreements, multi-parties Diversified relationship family, friends, employers, etc. https://mcuinstitute.com/.

[Audio] 20 Insurance dispute https://mcuinstitute.com/.

[Audio] 21 Mediator's Code of Business Code of Regulatory Authority's Ethics Code of Conduct Conduct 證券及期貨事務監察委員會 保險業監管局 強制性公積金計劃管理局 https://mcuinstitute.com/.

[Audio] 22 Regulatory Authority's Code of Conduct Securities & Futures Commission of Hong Kong (SFC) 證券及期貨事務監察委員會  oversees regulated activities related to insurance products offered by SFC licensees and may handle conduct complaints involving these intermediaries Insurance Authority (IA) 保險業監管局  regulates and supervises the insurance industry, handling complaints about the conduct of authorized insurers and licensed insurance intermediaries, but it does not adjudicate claims disputes; such claims can be referred to the Insurance Complaints Bureau (ICB) for resolution. Source: SFC: https://www.sfc.hk/TC/ IA: https://www.ia.org.hk/ https://mcuinstitute.com/.

[Audio] 23 Regulatory Authority's Code of Conduct Mandatory Provident Fund Schemes Authority (MPFA) 強制性公積金計劃管理局  deals with disputes related to mandatory provident fund schemes rather than insurance but may collaborate with the IA and SFC on overlapping regulatory matter Source: MPFA: http://www.mpfa.org.hk https://mcuinstitute.com/.

[Audio] 24 Part 04 Effectiveness of using mediation to deal with Insurance dispute https://mcuinstitute.com/.

[Audio] 25 Effectiveness of using mediation to deal with Insurance dispute Save money Time saving Humanize Maintain relationship No geographical restrictions https://mcuinstitute.com/.

[Audio] 26 Save money Mediation costs only cost thousands to tens of thousands Litigation costs reach up to hundreds of thousands to millions https://mcuinstitute.com/.

[Audio] 27 Real-life example  A manufacturer who claimed $31 million from its insurer after theft of computers. The parties reached a mediated settlement of $4.125 million, avoiding prolonged litigation. The case evaluator estimated the risk-discounted value of the claim around $4 million, highlighting the settlement's fairness and cost-effectiveness.  The parties saved millions in legal fees, court costs, and interest by settling through mediation instead of going to trial. The mediation process also avoided escalating the dispute costs over time.  Data from broader studies show mediation can save approximately €5,000 to €7,000 (about US$5,400-$7,600) per dispute in European contexts and reduce the time to settle disputes by months or years Source: https://blc.law/resources/case-studies/the-computer-heist-an-unusualcommercial-mediation/ https://www.europarl.europa.eu/RegData/etudes/note/join/2011/453180/IP OL-JURI_NT(2011)453180_EN.pdf https://mcuinstitute.com/.

[Audio] 28 Part 05 How to deal with parties with insurance dispute in mediation https://mcuinstitute.com/.

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[Audio] 30 Ten Rules to Succeed in Mediation Rule 1 -- The decision makers must participate Rule 2 – Have hard copies of important documents Rule 3 -- Be right, but only to a point Rule 4 -- Build a deal Rule 5 -- Treat the other party with respect https://mcuinstitute.com/ https://mcuinstitute.com/.

[Audio] 31 Ten Rules to Succeed in Mediation Rule 6 -- Be persuasive Rule 7 -- Focus on interests Rule 8 -- Be a problem solver for interests Rule 9 -- Work past the anger Rule 10 -- Be patient https://mcuinstitute.com/ https://mcuinstitute.com/.

[Audio] 32 Part 06 Case Study Source: https://www.fdrc.org.hk/en/html/publications/casestudies https://mcuinstitute.com/.

[Audio] 33 Background : Mr. Chan bought an education insurance plan at a bank 15 years ago. He wanted to use the money, when the plan matured, to pay for his son's university tuition fees. This year, his son was admitted to the university and the plan also matured. However, Mr. Chan found out that the amount he could get from the plan was HK$100,000 less than the total premium he had paid over the past 15 years. He felt that the situation was different from what the bank staff had told him. He lodged a written complaint to the bank. Issues for dispute : The bank explained that the shortfall between the actual and the expected maturity values was caused by Mr. Chan's partial cash withdrawal several years ago which subsequently affected the roll-over cash value of the plan. The bank added that the bank staff had already explained all the policy provisions to him at the time of selling and Mr. Chan had signed the relevant documents to acknowledge his understanding of the provisions. Mr. Chan could not resolve the dispute with the bank. He made an application to FDRC for his case to be resolved by mediation. https://mcuinstitute.com/ https://mcuinstitute.com/.

[Audio] 34 Result : The mediator helped both parties identify the issues in dispute and assisted them to generate options for settlement. As a gesture of goodwill, the bank offered Mr. Chan a small sum of money to cover part of his son's tuition fees. Thus, Mr. Chan could pay his son's tuition fees with the maturity value of the insurance plan and the bank's offer. Mr. Chan was very happy that the tuition fee problem was resolved and his son could continue his university education. And the bank was pleased to keep the banking relationship with Mr. Chan. https://mcuinstitute.com/.

[Audio] 35 Background : Ms. Yeung had been a customer of Bank A for many years. When she was 50 years old, she decided to make plans for retirement. She approached Bank A and subscribed to a retirement savings plan with a ten-year contribution period. She expected to receive a guaranteed retirement cash of HK$30,000 each year for ten years after she turned 60 years old, a lump sum payment of HK$500,000 plus dividend at the age of 70 and a free life term insurance of HK$250,000 up to the age of 100. On the maturity of the retirement savings plan, Ms. Yeung found out that she would not be entitled to the lump sum payment of HK$500,000 if she received the guaranteed retirement cash each year for ten years. She was still entitled to the free life term insurance. Ms. Yeung was very upset and believed that she was misled by the staff of Bank A at the time she subscribed to the retirement savings plan. Issues for dispute : Ms. Yeung complained to Bank A. It was explained to her that the lump sum payment would only be paid to her at the age of 70 if no retirement cash was withdrawn from the retirement savings plan. Ms. Yeung was not satisfied with Bank A's explanation and she submitted an application to the FDRC in order to resolve the matter https://mcuinstitute.com/ https://mcuinstitute.com/.

[Audio] 36 Result : The mediator helped both parties identify the issues and understand each other's concerns and interests. Ms. Yeung and Bank A were able to find common solutions and Ms. Yeung was given a thorough explanation about the structure and the content of her retirement savings plan. The two parties settled the dispute with help from the mediator and they appreciated the mediator's efforts in bridging the gap between them. Both parties indicated that they would recommend the FDRC mediation services to others in need. https://mcuinstitute.com/.

[Audio] 37 Quite often, a dispute may get complicated by tangling with negative emotions if it cannot be settled in an early stage. As a result, the conflict is aggravated, more often by the complainant, resulting in dissatisfaction over the relevant officers or even the whole institution, in addition to the original dispute. Emotional factors may obscure a dispute and create difficulties to the resolution. In dealing with a case with emotional elements, a mediator may try to "separate people from the problems" by eliminating emotional elements like grievances and disappointments. Eventually, the core issue of the conflict will be identified and a solution will emerge in the resolving process … https://mcuinstitute.com/ https://mcuinstitute.com/.

[Audio] 38 Background : Mr. Tong, a 60-year-old businessman of cross-border trading, was a loyal customer of Bank C, in which he held both his personal and business accounts. One day, Mr. Tong enquired with Bank C on capital preservation investment products for achieving higher returns. In response, two insurance plans with different features were introduced to him by the counter staff. However, he did not pay attention to the different features of the plans and viewed them as similar products. One year later, he eventually found that the two plans were indeed different. Originally he expected that both plans were of 3-year tenor which allowed him to get back the principal plus interest three years later. However, he later found that one of the insurance plans was indeed with a horizon of 8 years. He felt like being cheated and lodged a complaint to the bank. In addition to complaining the relevant staff for giving misleading advice during the selling process, he also alleged other staff for negligence and intentional delays which prevented him from acquiring enough information to revoke the contract in the cooling off period. Moreover, he also accused the bank for its procedurally inappropriateness and intentional delays when selling the insurance plans and handling the complaints for him. https://mcuinstitute.com/ https://mcuinstitute.com/.

[Audio] 39 Issues for dispute : Mistrust accumulated over time. Mr. Tong started his own "investigation" and claimed that he managed to identify a variety of "wrong-doings" of the bank and complained on every working procedure of the bank. However, the bank, after its internal investigation, claimed that the working procedures of its relevant staff were properly performed in accordance with its internal guidelines and rules. https://mcuinstitute.com/ https://mcuinstitute.com/.

[Audio] 40 Result : During the case management process, it was discovered that Mr. Tong had a very busy working schedule such that he had no time to read through the product brochure to understand his subscribed insurance plans. Also, during the whole complaint handling process, both parties spent much time on handling complaints on people and procedures instead of negotiating on the remedial arrangement. Mediation provided an excellent chance for both parties to re-negotiate for a solution calmly. During the mediation session, the mediator assisted both parties to "separate people from the problems". The bank eventually identified and addressed the needs of Mr. Tong by offering him a flexible financial arrangement. Mr. Tong was pleased to accept it. https://mcuinstitute.com/.

[Audio] 41 Maintain relationship Fighting lawsuits will lead to worsening / stiff relations between the two parties Mediation provides a platform for both parties to understand each other's needs and safeguard common interests Successful mediation - the relationship between the two parties is not affected https://mcuinstitute.com/.

[Audio] 42 Part 07 Q & A https://mcuinstitute.com/.

[Audio] 43 Thank you for your participation https://mcuinstitute.com/.

[Audio] 44 The information included in this presentation is general information only and should not be relied upon without further review by the appropriate professional advisors. Some of the information included in this presentation might involve information from the Internet, further verification of accuracy and copyright is highly recommended. This presentation is for internal use only and not intended for public distribution. https://mcuinstitute.com/.