12 July 2026
Insurance companies and intermediaries must uphold the highest standards of ethical conduct and professionalism, which form the cornerstone of public trust in the insurance industry. In response to the market’s ongoing development and evolving landscape, the Insurance Authority (IA) is obliged to adopt a comprehensive and forward-looking approach to regulation and enforcement work, alongside public education initiatives, to spearhead sustainable industry growth, safeguard policyholders’ interests and ensure fair treatment.
To encourage the industry to strengthen customer protection, the IA has, since 2025, rolled out three phased measures to enhance sales regulation of participating policies. These include the implementation of illustration rate caps effective July 2025, regulatory expectations on referral fees paid by broker companies effective October 2025 and a commission spreading mechanism for insurance intermediaries effective January 2026. The objective is to foster healthy competition among insurers, while better aligning the interests of policyholders and intermediaries, thereby incentivising intermediaries to deliver high-quality pre-contract and ongoing servicing after the point of sale.
Following the introduction of these measures, we have been proactively monitoring compliance with regulatory requirements and taking stern enforcement action to rectify market misconduct and ensure the robustness of our regulatory framework. At the same time, the IA continues to pursue a multi-pronged approach — collecting operational data, conducting on-site inspections, and carrying out targeted spot checks — to crack down on improper conduct such as illegal referrals and cross-boundary solicitation. Senior executives at licensed institutions are held accountable for compliance responsibilities throughout the entire sales process.
Taking insurance intermediaries as an example, the IA, as the licensing authority, adopts a risk-based approach in handling licence applications and renewals. This may involve imposing licensing conditions to restrict certain business models and requiring more frequent reporting to curb improper or high-risk behaviors. In early June this year, for instance, we imposed licensing renewal conditions on two insurance broker companies for failing to effectively control referral activities, requiring them to suspend the acceptance of referral business. These actions are not isolated initiatives and we will not end from there. Should similar irregularities be identified in the market, we will respond promptly with proportionate and decisive regulatory action to restore market order.
The IA is also committed to tackling conduct risks at their source. This includes addressing the “rolling bad apple” phenomenon to prevent individuals with misconduct record from evading the consequences of their actions simply by moving between companies. With the IA’s support, the Hong Kong Federation of Insurers introduced a reference checking scheme in September 2024 for individual insurance agents carrying on long-term business. In view of the positive industry response, this initiative was expanded earlier this year to cover insurance agencies and broker companies (excluding banks), with the support of the Hong Kong Confederation of Insurance Brokers and the Professional Insurance Brokers Association. Insurance institutions are now able to seek conduct-related information from previous principals of individuals before making hiring decisions.
To mitigate the risks posed by “bad apples” rolling across sectors within the financial industry, the IA has further collaborated with the Hong Kong Monetary Authority (HKMA) by launching a cross-sector reference checking arrangement in July of this year. This phase encompasses more than 110,000 insurance intermediaries carrying on long-term business across approximately 1,000 insurance institutions and banks. Building on this momentum, our efforts will continue – the IA and the HKMA will review and refine the arrangement, and explore ways to further integrate respective mechanisms to facilitate reference checks across the insurance and banking sectors and ultimately enhance conduct standards more broadly across the financial industry.
In addition to regulation and enforcement, the IA attaches great importance to public education. We promote key considerations when purchasing insurance and publicise our regulatory work through various channels. Initiatives include producing the television drama series “IA Files (保監有道)” and launching the campaign “7 Key Notes for Buying Insurance in Hong Kong (赴港投保7件事)” to deepen public understanding. While upholding compliance, protecting policyholders’ interests and maintaining market order, the IA will continue to refine its regulatory framework, take firm enforcement action, and collaborate with other regulators and law enforcement agencies to combat market misconduct. At the same time, we will actively promote public education to ensure the sustainable development of Hong Kong’s insurance market.
Alan Wu
Acting Head of Conduct Supervision, Insurance Authority
12 July 2026