The Hong Kong’s Insurance Authority (IA) has released a consultation paper on capping of numbers of insurers that can be represented by a licenced agent.
In mid-2019 the IA is set to take over the regulation of insurance intermediaries and has opened a consultation period for the public to give its views on whether there should be a cap on the number of insurers that can be appointed under a licenced individual insurance agent or insurance agency and what the maximum should be.
The IA’s draft legislation proposes to increase in the maximum number of insurers that can represented by a licenced agent or agency to five from four, but keep the number of long-term insurers at two. The existing regulatory framework was set out in the Code of Practice for the Administration of Insurance Agents by The Hong Kong Federation of Insurers.
According to a Thomson Reuters report, as at 17 August 2018, there were 161 insurers authorised to carry on insurance business in or from Hong Kong, comprising 94 general business insurers, 48 long-term business (life) insurers and 19 composite insurers (both general and long-term).
Under the draft proposals by the IA, a new section, 64I(1), will criminalise anyone (agents or agencies) which disregards the capping restriction.
It will read: “A person must not, at any time, be appointed as a licensed insurance agency or licensed individual insurance agent in carrying on a regulated activity for more than the maximum number of authorized insurers that are prescribed by rules made under section 129.”
The IA will take on feedback on the proposed draft until 31 December 2018.