Data published by the Insurance Authority (IA) shows a clear link between short, responsible officer tenures at Hong Kong broker companies and regulatory consequences – including interviews before approval, supervisory reviews, and in some cases, licence conditions.
The findings are in the 13th edition of Conduct in Focus, published September 30, 2026 – and for broker firm principals, the implications are operational.
Between September 23, 2019, and June 30, 2026, the IA approved 3,201 individuals as responsible officers (ROs) across licensed insurance agencies and broker companies.
The overall average active tenure stands at 3.8 years. Among entities carrying on long-term business, 51.4% of RO appointments have lasted under two years.
Broker companies lag agencies significantly. ROs at broker firms average 2.3 years in the role, against 3.3 years at agencies. The standard entity licence period is three years.
The IA treats tenure beyond three years as a benchmark for stable management. Short or repeated appointments may point to inadequate governance, insufficient resourcing, or limited authority granted to the RO. Firms showing a pattern of short tenures face supervisory reviews or on-site inspections.
RO candidates from broker companies carrying on long-term life business – especially those using referral-based distribution – are now more likely to face an interview before approval. The interview covers the candidate’s knowledge of the firm’s business model, governance experience, and grasp of applicable regulatory requirements.
The pressure extends to continuing professional development. In a July 11, 2025, circular, the IA stated that non-compliance with the compulsory CPD requirement for ROs – effective August 1, 2025 – affects fitness and properness and triggers greater scrutiny of the broker company concerned.
Of the 3,201 approved ROs, 81.4% have held one appointment, averaging 3.5 years. Fewer than 5% hold three or more appointment records.
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The IA’s position on referral business has shifted from guidance to direct licensing action.
Conduct in Focus confirms the IA imposed licence renewal conditions on three broker companies for failures to control referral activities – including prohibitions on accepting new referral business.
Alan Wu, acting head of conduct supervision at the IA, stated in a July 12 commentary on the IA’s website: “These actions are not isolated initiatives, and we will not end from there. Should similar irregularities be identified in the market, we will respond promptly with proportionate and decisive regulatory action to restore market order.”
Wu also wrote: “Insurance companies and intermediaries must uphold the highest standards of ethical conduct and professionalism, which form the cornerstone of public trust in the insurance industry.”
The report flags an arrangement the IA calls “self-referral” – where a customer or family member enters a referral agreement with a broker so a fee is routed back as an effective rebate. The IA’s position: regardless of the label, it is undocumented rebating, which is prohibited.
For brokers running compliant referral models, the rules are unchanged. Unlicensed referrers may only introduce customers – not carry out any regulated activities. All advisory work must be done by the licensed intermediary. Under the IA’s September 1, 2025, circular, referral fees exceeding 50% of commission received trigger additional disclosure requirements and scrutiny.
The enforcement push runs alongside strong growth in participating business – the product segment at the centre of both referral and commission concerns.
Hong Kong’s total gross premiums reached HK$291.6 billion in Q1 2026, a 32.3% year-on-year rise, according to IA provisional statistics released July 24. New office premiums from participating business rose 55.1% to HK$282.8 billion in 2025, based on IA data.
Commission spreading rules, in effect from January 1, 2026, cap first-year payments at 70% of total commission, with the remainder spread over at least five years – limiting the upfront commission pool available to inflate referral fees.
Two enforcement cases extend the accountability chain below the RO level.
In February 2026, the IA banned a former agent after she directed a downline to submit a misleading response to the regulator, following the discovery that the downline had submitted a false academic certificate to an insurer.
In May 2026, a second ban followed. An agent manager provided her login credentials to an unregistered downline, enabling him to complete a Mandatory Provident Fund (MPF) consolidation application for a client who later denied authorising it.
In both cases, the managers facilitated rather than stopped the misconduct. The IA found that sufficient grounds to question fitness and properness under the Insurance Ordinance.
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The IA received 652 complaints in H1 2026, up 10% on the same period in 2025. The largest category was “Business or Operations,” up 9% year-on-year, driven by agent assignment failures tied to intermediary turnover.
The report also identifies selective statistics in digital advertising – such as fulfilment ratios covering only a product’s first two years – as a breach of General Principle 1 in the Codes of Conduct and Section 90 of the Insurance Ordinance. Intermediaries are required to identify and correct distorted customer expectations before any sale proceeds. Campaigns that repeatedly generate misunderstandings must be amended or withdrawn.
