Hong Kong launches consultation on intermediaries

October 3 2018 by InsuranceAsia News Staff

The Hong Kong Insurance Authority has launched a public consultation on its proposed guidelines for the “fit and proper” criteria and continuing professional development (CPD) for licensed insurance intermediaries under the Insurance Ordinance in preparation for the upcoming changes in regulatory regime.

The IA plans to assume the regulation of intermediaries in mid-2019 from the broking organisations that self-regulate. Under the new regime a person will require a licence granted by the IA to carry on regulated activities.

The requirements to be “fit and proper” will include: education, qualifications or experience of the person; reputation, character, reliability and integrity of the person; and the person’s financial status or solvency.

The draft CPD Guideline aims to “standardise, modernise and update” existing CPD requirements applicable to intermediaries in line with new statutory requirements.

The two draft guidelines propose changes including setting minimum education requirements for individuals licensed under the new regime to ensure that they have the necessary language proficiency and numerical skills.

In addition, responsible officers of insurance agencies and broker companies should hold a degree from a recognised university or tertiary education institution since they are subject to higher levels of responsibility under the new regime.

The IA is looking to raise the minimum CPD hours requirement for individual licensees from 10 hours to 15 hours a year, of which at least three hours must relate to ethics or regulations. Online or e-learning courses will be recognised for up to five CPD hours. Training courses offered by organisations, such as the existing three self-regulatory bodies and other regulatory or enforcement bodies, will be recognised subject to review by the IA.

Insurance intermediaries who are registered before the new regime commences will automatically be deemed to be licensees for a transitional period of three years. Chief executives and responsible officers will also be deemed as responsible officers under the new regime.

The IA proposes to exempt deemed licensees from the proposed minimum education requirements and suggests that deemed licensees with at least 15 years of industry experience be exempt from the new education requirements for becoming responsible officers under the new regime.

Clement Cheung, chief executive of the IA, commented: “Insurance products and distribution channels are becoming increasingly sophisticated and diversified. Naturally, consumers will expect corresponding professional advice and quality services from insurance intermediaries to help them to purchase suitable insurance products.”

Members of the public are welcome to submit their comments to the IA on or before November 30 by email to comment_codeandguideline@ia.org.hk.

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