ILAS products and their offering documents (including the Product Key Facts Statement), illustration documents and marketing materials must be authorised by the Securities and Futures Commission (SFC) before they can be offered to the public in Hong Kong, unless an exemption under the Securities and Futures Ordinance (SFO) applies.
The investment options of ILAS products offered for consumers to select may link to retail funds that are authorised by the SFC pursuant to the Code on Unit Trusts and Mutual Funds and other portfolios that are internally managed by the insurance company on a discretionary basis.
Insurance companies issuing ILAS policies are authorised and regulated by the Insurance Authority (IA).
According to the guidance note issued by the IA, insurance companies should comply with the comprehensive requirements for underwriting ILAS business in all aspects, ranging from product design, clarity of policy documents/publications, remuneration structure and disclosure, sales process to post-sale controls.
Under the Insurance Companies Ordinance (ICO), any persons selling or advising on insurance products are required to be appointed insurance agents or authorised insurance brokers.
The registration of insurance intermediaries and complaints about their misconduct are handled by three self-regulatory organisations (SROs) approved by the IA:
- Insurance Agents Registration Board (IARB) set up under the Hong Kong Federation of Insurers (HKFI): Insurance agents including banks and their staff who sell ILAS as agents of insurers
- The Hong Kong Confederation of Insurance Brokers (CIB): Insurance brokers
- Professional Insurance Brokers Association (PIBA): Insurance brokers
In selling ILAS products, banks and their staff are regulated and supervised by the Hong Kong Monetary Authority (HKMA).