HKIA reinforces sanctity of license to operate

Violations can result in a fine and imprisonment for up to two years.

The Insurance Ordinance (Cap. 41) aims to ensure trust and confidence in Hong Kong's insurance market by requiring that only individuals licensed by the Insurance Authority (IA) can sell insurance, give advice, and arrange insurance policies.

Hong Kong is an international finance centre that attracts global clients seeking high-quality financial products and services.

The city's life insurance industry is particularly important, catering to individuals from other jurisdictions, especially Mainland China, by offering a wide range of insurance policies.

To obtain a license, individuals must meet criteria related to character, education, and insurance qualifications.

Once licensed, they must follow the conduct requirements set by the ordinance, including relevant rules, codes of conduct, and guidelines to best serve their clients' insurance needs.

Section 64G of the ordinance underscores the importance of licensing by making it a criminal offence to engage in regulated activities without a proper licence, unless an exemption applies. Violations can result in a fine and imprisonment for up to two years.

The authority also reminded those carrying licences that the HKIA will not tolerate intermediaries who renege on their responsibilities by not performing regulated activities themselves.

“The Hong Kong insurance market has a collective duty to ensure that any client who comes to buy insurance here is provided with quality, suitable, impartial and objective advice based on the client’s insurance needs and best interests,” the HKIA said in a circular.

“Clients must be put in a position to make informed decisions on the insurance protections they are considering. Licensed insurance intermediaries and authorized insurers must work together to ensure this so that the insurance market in Hong Kong is underpinned with trust, confidence and a deserved reputation for treating policy holders fairly.” it added.

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