The Insurance Authority (IA), Hong Kong’s new insurance regulator that took over late last month, will spend the next two years formulating a new licencing framework for the almost 100,000 insurance agents in the special administrative region.
“At present, there is no plan for any grandfather clause for existing agents. This means all of the roughly 100,000 insurance salespeople in Hong Kong will need to meet the minimum qualifications to apply for the licence,” IA chairman Moses Cheng Mo-chi told the South China Morning Post.
He added that all agents must receive training annually to maintain their authorisation to sell insurance policies. This means that some existing agents may not be able to keep their licence.
Cheng said that the new rules will be an important action in maintaining the quality and security of Hong Kong’s insurance sales force.
“When the quality and reputation is upgraded, it will help attract more young talent to join the industry,” he added.
Under the previous regulatory agency, the Office of Commissioner of Insurance, insurance agents did not have to apply for a licence, but they had to be registered with three self-regulating bodies.
Meanwhile, IA executive director of market conduct Stephen Po said that the regulator will work with the industry to formulate the requirements and other particulars for licensing and training before applications are opened.
“There will be a lot of guidelines to make sure only fit and proper people can get a licence to sell policies to the public,” Po said.
However, the IA has no plans to regulate products, citing the free market.
“Hong Kong is a free market so we don’t want to add restrictions on the products, said Cheng. “We would require companies to give fair treatment to policyholders when they design products.”
Other aspects the IA will work on as it begins its job will be the creation of a protection fund to compensate policyholders in case of insurer insolvency, as well as coordinating with its mainland Chinese counterpart to come up with more favourable treatment for Hong Kong-based reinsurers to help expand the reinsurance sector.
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