Consultation conclusions on the guideline on pecuniary penalty for licensed insurance intermediaries

28 June 2019

The Insurance Authority (IA) today (28 June 2019) published consultation conclusions on the Guideline on Exercising Power to Impose Pecuniary Penalty in Respect of Regulated Persons under the Insurance Ordinance (Cap. 41) (the “Guideline”).

The Guideline suggests that a pecuniary penalty should be effective, proportionate and fair, and that the IA will consider all circumstances of the case and take into account all relevant factors including the nature, seriousness and impact of the conduct, behavior of the person since the conduct was identified, and disciplinary and compliance records when considering whether to impose a pecuniary penalty and the amount of the penalty.

The IA had actively engaged insurance practitioners and Self-Regulatory Organisations in devising the Guideline. The Guideline was published for public consultation from 26 October to 27 December 2018. The respondents generally welcomed the introduction of unified penalty standards across the industry for protection of policy holders and supported the IA’s policy that it may publicize its decisions of imposition of a pecuniary penalty against a regulated person. The IA also considers that given the breadth of regulated activities carried on by licensed insurance intermediaries, it would be more appropriate for the IA to take into account the unique facts and circumstances of each case in order to determine an appropriate pecuniary penalty. From the publication of disciplinary actions, the industry would be able to discern the kind of penalties the IA would impose for different non-compliance or misconduct.

The Guideline will be gazetted and will come into operation immediately upon the commencement of the new statutory regulatory regime for insurance intermediaries on 23 September 2019.

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