The Hong Kong Insurance Authority (IA) has taken regulatory action against two licensed insurance brokers for failing to meet core compliance requirements related to client fund management and professional indemnity insurance.
One of the firms, Century Investment Planning Limited, received a public reprimand, while another unnamed broker was fined HK$12,000.
Century Investment Planning Limited, which is no longer licensed, was found to have repeatedly failed to deposit client monies into designated separate accounts. The firm also used those funds improperly and delayed the remittance of premiums to an insurer.
These actions breached the rules established under the earlier self-regulatory framework as well as the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Cap. 41L).
The second case involved an incorrect calculation of the professional indemnity insurance obligation under the same previous regime. The resulting coverage shortfall was approximately HK$11.8 million.
No financial harm to clients was reported in either instance, and both companies were cooperative throughout the enforcement process.
The IA reiterated that separating client funds from company assets and maintaining adequate insurance are foundational safeguards in the regulation of insurance intermediaries.
The enforcement decisions come shortly after the IA affirmed its commitment to recommendations made by the Process Review Panel (PRP), which evaluates the regulator’s operations.
The PRP's 2024 Annual Report reviewed cases from January to December 2023, examining aspects of licensing, complaints management, enforcement, and inter-agency cooperation.
During that period, the IA processed or closed 37,112 cases, a decline from previous years. The PRP reviewed 20 selected cases and acknowledged the IA’s measures to improve procedural efficiency. The IA welcomed the feedback and stated its intent to act on the panel’s proposals.
The PRP report noted several initiatives taken by the IA, including a fast-track procedure for CPD non-compliance and the introduction of the Disciplinary Executive Process for handling less complex disciplinary matters.
However, the panel recommended further enhancements such as formalising timelines for case resolution, expanding the disciplinary panel roster, and creating uniform frameworks for recurring types of cases. Ongoing procedural assessments were also encouraged.
In response, the IA indicated it is finalising internal benchmarks for processing times and is applying performance metrics to monitor enforcement activities. Additional digital tools, including a platform for online CPD non-compliance reporting and electronic licensing submissions, have been deployed to improve efficiency.
The IA also reported a stabilisation in staff turnover and said it is continuing to build partnerships with law enforcement and regulatory bodies. A tariff-based penalty structure for less serious offenses is expected to be introduced in 2025 to accelerate decision-making.
The PRP advised the IA to distinguish more clearly between simple and complex cases using data-driven methods and targeted workflows. Automation and improved case classification were identified as areas for further development.
The IA confirmed that internal improvements in documentation and workflow coordination have already begun. It stated that promoting cross-functional collaboration would remain a priority for addressing complex regulatory matters.
