Hong Kong regulator releases broker education criteriaAugust 1 2019 by Andrew Tjaardstra
Hong Kong’s Insurance Authority has published the consultation conclusions for two draft regulations for intermediaries: the Guideline on “fit and proper” criteria under the Insurance Ordinance and the Guideline on Continuing Professional Development.
A majority of respondents supported the proposal to enhance the minimum education requirements of licensed intermediaries with a view to raising their quality of service and professionalism.
In future, new licensees must attain a standard of level 2 or above for five subjects in the Hong Kong Diploma of Secondary Education Examination (including Chinese or English and maths); existing licensees are exempt.
An existing licensee is a person who is registered with the Insurance Agents Registration Board, the Hong Kong Confederation of Insurance Brokers and the Professional Insurance Brokers Association immediately before the commencement of the new regulatory regime for insurance intermediaries on September 23.
New responsible officers of insurance agencies and broker companies must possess a bachelor degree in addition to the requisite experience. Any existing and former responsible officers of insurance agencies and chief executives of insurance brokers as well as existing and former intermediaries with 15 years of industry experience will be exempt from the new minimum education requirements for responsible officers.
Under the current self-regulatory regime for insurance intermediaries, chief executives of insurance brokers are required to possess a minimum of five years’ industry experience including at least two years of management experience, unless they are a holder of an acceptable insurance qualification. Under the new regime, similar experience requirement will be applicable to responsible officers of licensed insurance agencies.
The proposed organisational competence requirements on insurance agencies and brokers also received widespread endorsement.
Similarly, broad agreement was expressed on the proposal to increase the minimum Continuing Professional Development (CPD) hours from 10 to 15 per year – including three hours on “ethics or regulations” – and the acceptance of e-learning courses for this purpose.
In order to facilitate implementation, certain exemptions and transitional arrangements are provided for existing practitioners.
The two guidelines will take effect immediately upon commencement of the new statutory regulatory regime for intermediaries on September 23 this year – except for the new minimum CPD hours which will come into operation on August 1 2021.
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