May 2021
There are two different types of insurance intermediaries in Hong Kong: licensed insurance brokers and licensed insurance agents.
Licensed insurance agents are appointed by (and represent) insurers. They are limited to promoting and arranging insurance policies on behalf of the insurers they represent. In general, they can only be appointed by a maximum of 4 insurers, of which no more than 2 can be life insurers. They are often remunerated by the insurers they represent by way of commission (being a percentage of the premium paid by the policyholder for the insurance policy).
Licensed insurance brokers act for, advise and provide services to policyholders and potential policyholders. They advise potential policyholders on their insurance needs and source appropriate insurance policies from insurers to address those needs. They are not limited in the number of insurers they deal with, and can approach any number of insurers to source the most appropriate insurance for their client policyholder.
Like insurance agents, when a licensed insurance broker company arranges an insurance policy for its client policyholder, the broker company is often remunerated by the insurer in the form of commission. However, because the broker company acts for the policyholder, it is required to inform the policyholder that it will receive such remuneration from the insurer. Further, the policyholder has a right to ask the broker company how much commission it will be paid, and on request the broker company will have to give disclosure on this.