[IA]Insurance Authority consults on proposed guidelines on (i) “Fit and Proper” criteria and (ii) Continuing Professional Development requirements for licensed insurance intermediaries

The Insurance Authority (IA) today (28 September 2018) launched a two-month public consultation on drafts of the (i) Guideline on “Fit and Proper” Criteria for Licensed Insurance Intermediaries under the Insurance Ordinance (Cap. 41) (“F&P Guideline”), and (ii) Guideline on Continuing Professional Development for Licensed Insurance Intermediaries (“CPD Guideline”) in preparation for commencement of the new regulatory regime for insurance intermediaries.

New Regulatory Regime

It is planned that in mid-2019, the IA will take over the regulation of insurance intermediaries from the three Self-Regulatory Organisations (SROs)1. Under the new regime, a person will require a licence granted by the IA to carry on regulated activities. A person must be fit and proper in order to be licensed and this requirement is ongoing.

The draft F&P Guideline outlines the key criteria and matters that the IA will normally consider in determining whether a person is fit and proper. These criteria can be broadly grouped into three categories:

(i) education, qualifications or experience of the person;


(ii) reputation, character, reliability and integrity of the person; and


(iii) the person’s financial status or solvency.


The draft CPD Guideline aims to standardise, modernise and update existing CPD requirements applicable to insurance intermediaries in line with new statutory requirements.

Major changes to minimum education and CPD requirements

The two draft guidelines propose certain changes to the current requirements. Major proposals include setting minimum education requirements for individuals licenced under the new regime in order to ensure that they have the necessary language proficiency and numerical skills.

An individual licensee should attain Level 2 or above in five subjects (including Chinese Language or English Language, and Mathematics) in the Hong Kong Diploma of Secondary Education Examination2. The IA also proposes to accept a range of professional qualifications and other education qualifications as an alternative means of satisfying the minimum education requirement. In addition, responsible officers of insurance agencies and broker companies should hold a bachelor’s degree from a recognised university or tertiary education institution since they are subject to higher levels of responsibility under the new regime.

The IA proposes to raise the minimum CPD hours requirement for individual licensees from 10 hours to 15 hours per annum, of which at least 3 hours must relate to ethics or regulations. Online or e-learning courses will be recognised for up to 5 CPD hours. Training courses offered by organisations, such as the current three SROs and other regulatory or enforcement bodies, will be recognised subject to review by the IA.

Transitional Arrangements

Insurance intermediaries who are validly registered with the SROs immediately before the new regime commences will automatically be deemed to be licensees for a transitional period of three years. Chief executives / responsible officers will also be deemed as responsible officers under the new regime.

In recognition of the contributions and the value of longstanding industry practitioners, the IA proposes to exempt deemed licensees from the proposed minimum education requirements. The IA also suggests that deemed licensees with at least 15 years of industry experience be exempt from the new education requirements for becoming responsible officers under the new regime.

“Insurance products and distribution channels are becoming increasingly sophisticated and diversified. Naturally, consumers will expect corresponding professional advice and quality services from insurance intermediaries to help them to purchase suitable insurance products. The draft guidelines aim at enhancing the professional standards of insurance intermediaries to cater to consumers’ growing needs,” said Mr Clement Cheung, Chief Executive Officer of the IA.

“In formulating the consultation proposals the IA has actively engaged with the insurance industry through soft consultation and working and discussion groups. Together with the industry, we seek to develop a more robust regulatory regime for the better protection of policy holders and the sustainable development of the industry,” Mr Cheung added.

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 30 November 2018 by email to comment_codeandguideline@ia.org.hk, by fax to 3899-9993, or by post to the IA Office on 19/F, 41 Heung Yip Road, Wong Chuk Hang, Hong Kong.



1The three SROs are the Insurance Agents Registration Board established under The Hong Kong Federation of Insurers, The Hong Kong Confederation of Insurance Brokers and Professional Insurance Brokers Association.

2Equivalent results obtained in the Hong Kong Certificate of Education Examination, or specified diplomas will also be accepted.


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