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Insurance Authority consults on proposed guideline on pecuniary penalties for licensed insurance intermediaries

26 October 2018

The Insurance Authority (IA) today (26 October 2018) launched a two-month public consultation on the draft Guideline on Exercising Power to Impose Pecuniary Penalty in respect of Regulated Persons under the Insurance Ordinance (Cap. 41) (the “Guideline”).

This consultation forms part of the IA’s preparation for the commencement of the new regulatory regime for insurance intermediaries tentatively starting from mid-2019 under which the IA will start direct regulation of insurance intermediaries.

The draft Guideline suggests that the penalty should be effective, proportionate and fair. The IA will consider all circumstances of the case and take into account a number of factors including the nature, seriousness and impact of the conduct, behavior of the person since the conduct was identified, and disciplinary record and compliance history of the person. The financial resources of the regulated person is also a factor the IA proposes to consider in determining whether to impose pecuniary penalty on the regulated person and the penalty amount.

The Guideline will take effect upon commencement of regulation of insurance intermediaries by the IA. However, all cases of alleged contravention of applicable rules or requirements that occurred before the commencement date will be followed up and considered by the IA according to the applicable rules or requirements prevailing at the time when the contravention occurred. In such cases the range of sanctions (including pecuniary penalties) available to the IA will be the same as those that could have been imposed by the Self-Regulatory Organisations under the current regime.

The consultation paper is now available on the IA website. Members of the public are welcome to submit their comments to the IA on or before 27 December 2018 by email to [email protected], by fax to 3899-9993, or by post to the IA Office on 19/F, 41 Heung Yip Road, Wong Chuk Hang, Hong Kong.