Insurance intermediaries are in for a change as Hong Kong’s Insurance Authority (IA) is overhauling the industry requirements as it gets ready to oversee these professionals.
The regulator has launched a public consultation on ‘fit and proper’ and ‘continuing professional development’ (CPD) requirements to strengthen public confidence in the insurance industry.
The new standards that IA has put up for a two-month public consultation to determine if a person is ‘fit and proper’ to be an insurance intermediary include qualifications or experience of the individual, their professional competence, honesty and fairness.
The regulator mentions the “need to streamline, standardize and update the CPD regime” and is proposing an overhaul since “minimum CPD requirements for insurance intermediaries in comparable jurisdictions are considerably higher”.
In Singapore, financial advisers who arrange life insurance business are generally required to attend at least 30 hours of structured CPD training annually, triple the required hours in Hong Kong.
IA is pushing to increase the minimum number of CPD hours from 10 to 15 per year and to introduce compulsory CPD activities of at least 3 hours of training related to a topic which falls under “Ethics or Regulations”, according to the consultation paper.
The proposals also including setting minimum education requirements for individuals licensed under the new regime to “ensure that they have the necessary language proficiency and numerical skills”.
According to the official figures, there were 2,410 insurance agencies, 63,931 individual agents, 25,668 responsible officers/technical representatives of insurance agencies, 774 insurance brokers and 8,964 chief executives/technical representatives of insurance brokers.
With 161 authorized insurers (including 13 of the world’s top 20 insurers) in Hong Kong is one of the biggest insurance hubs in the world.
If the IA is not satisfied that an individual is a fit and proper person for the purposes of conducting regulated activities, it is obliged to refuse an application by that person to be licensed or – if the person is already licensed- the IA may suspend or revoke such licence.
Currently, the Federation of Insurers, the Confederation of Insurance Brokers and the Professional Insurance Brokers Association are responsible for overseeing this sector.
Hong Kong Insurance Authority is set to take over around mid-2019.