24 September, 2015
The Insurance Companies (Amendment) Ordinance 2015 was gazetted on 17 July 2015. The Amendment Ordinance provides for establishment of an independent Insurance Authority and direct regulation of insurance agents and brokers by the independent Insurance Authority.
You can view the Amendment Ordinance here:
http://www.gld.gov.hk/egazette/pdf/20151929/es12015192912.pdf.
The Government has indicated establishment of the independent Insurance Authority will proceed in stages – first, establishment of the founding board by the end of 2015, which will appoint the chief executive and other senior officers; second, transfer of existing regulatory functions of the Office of the Commissioner of Insurance to the independent Insurance Authority by the end of 2016; third, direct regulation of insurance agents and insurance brokers by the independent Insurance Authority.
Establishment of the independent Insurance Authority marks a significant change in regulation of insurance intermediaries. Currently, the Office of the Commissioner of Insurance regulates insurance companies but does not directly regulate insurance intermediaries. Instead, Hong Kong operates an industry-led regulatory system for insurance intermediaries. In future, insurance intermediaries will need to be licensed by, and will be subject to direct regulation by, the independent Insurance Authority. As a result, the regulatory framework for intermediaries will be closer to the securities and futures markets, where intermediaries are licensed by, and subject to direct regulation by, the Securities and Futures Commission.
For further information, please contact:
Scott Carnachan, Deacons
scott.carnachan@deacons.com.hk
