HKIA considers smoothing mechanism for insurance commissions structure

It also reported a 99.9% compliance rate with Continuing Professional Development (CPD) requirements.

The Hong Kong Insurance Authority (HKIA) revealed the growing interest in the managing general agency (MGA) model, where agents are granted additional authority to handle underwriting and claims on behalf of insurers. 

The HKIA outlined its regulatory approach to this model, particularly through its licensing process, it said in its latest edition of Conduct In Focus on 28 March, detailing complaints statistics for the full year 2024 and addressing key regulatory issues in Hong Kong’s insurance market.

The report also highlights conflicts of interest in the insurance sector, particularly in commission structures for agents and brokers. 

The HKIA is considering a smoothing mechanism for commission payments on participating policies, similar to the system used for investment-linked assurance schemes, to prevent improper selling and ensure better servicing of policies.

The HKIA also reported a 99.9% compliance rate with Continuing Professional Development (CPD) requirements amongst insurance intermediaries for the 2023/24 assessment period, showing significant improvement since the CPD Non-Compliance League Table was introduced in 2021/22.