HKIA Intensifies Regulatory Measures for Insurance Brokers

The Hong Kong Insurance Authority (HKIA) is intensifying its regulatory measures against brokers mismanaging referral activities within the insurance distribution sector. In June, HKIA took action against two brokerage firms that failed to exercise adequate control over their referral operations, halting their acceptance of referral business. These firms represent a broader crackdown initiative by the regulator, aiming to enhance compliance in the industry.

Alan Wu, acting head of conduct supervision, emphasized that "we will respond promptly with proportionate and decisive regulatory action to restore market order" when identifying similar irregularities. To ensure compliance, HKIA is ramping up its oversight through increased inspections, data monitoring, and spot checks, focusing on improper practices like illegal referrals and unauthorized cross-border solicitation.

Since July 2025, HKIA has implemented new regulatory frameworks, including caps on illustration rates for certain policies, with broker referral fee expectations effective October 2025. Additionally, a commission-spreading mechanism among intermediaries will begin in January 2026 to reinforce accountability. To address the 'rolling bad apple' issue, HKIA and the Hong Kong Monetary Authority have launched a cross-sector reference-checking program for over 110,000 long-term insurance intermediaries, ensuring robust vetting across various institutions.

The Hong Kong Federation of Insurers manages a reference-checking system for individual agents, supported by HKIA since September 2024. Expanded this year to include insurance agencies and brokerage firms, this system demonstrates a sector-wide commitment to integrity. HKIA plans to review and potentially expand these frameworks, aiming for integrated checks across both insurance and banking industries.