Insurance companies and insurance intermediaries are regulated in Hong Kong under the provisions of the Insurance Companies Ordinance.
Insurance companies carrying on business in or from Hong Kong have to apply to the Insurance Authority for authorisation. To be an authorised insurer, the company has to fulfill requirements relating to capital, solvency, fitness and properness of management and shareholders and adequacy of reinsurance arrangements.
An insurance intermediary can be an agent or a broker. An insurance agent acts as the agent of an insurance company and sells insurance products on behalf of that company. An insurance broker, on the other hand, acts on behalf of the purchasers of insurance and looks for policies from a range of insurance companies.
The self-regulatory system for insurance intermediaries set out in the ICO defines the distinct roles of an insurance agent and an insurance broker. Insurance agents and insurance broker are required to be appointed or authorised respectively.
All insurance agents need to be registered with the Insurance Agents Registration Board (IARB) set up by the Hong Kong Federation of Insurers under the self-regulatory system of insurance intermediaries.
The IARB is approved by the Insurance Authority to implement and administer the Code of Practice for the Administration of the Insurance Agents. It handles complaints relating to the misconduct of insurance agents.
When the IARB considers that a complaint is substantiated, it may take disciplinary action against the insurance agents involved. Some examples of disciplinary actions are the issuance of reprimand, suspension, termination of registration, or other actions as the IARB thinks fit.
An insurance broker needs to become a registered member of one of the two approved broker bodies, namely The Hong Kong Confederation of Insurance Brokers (HKCIB) and Professional Insurance Brokers Association (PIBA).
To be a registered member of HKCIB or PIBA, one has to satisfy the minimum requirements relating to qualifications and experience, capital and net assets, professional indemnity insurance, keeping of separate client accounts and keeping of proper books and accounts.