The Government launched on 26 October 2012 a three-month public consultation on key legislative amendments to the Insurance Companies Ordinance (Cap.41) (ICO) for the establishment of an independent Insurance Authority (IIA).
The proposed key legislative amendments cover the following areas: (a) functions and governance structure of the IIA; (b) licensing regime for insurance intermediaries; (c) regulatory powers of the IIA; (d) regulatory arrangements for banks’ insurance intermediary activities; (e) the appellate mechanism and checks and balances; (f) levy and fees; and (g) transitional arrangements for pre-existing insurance intermediaries.
In particular, it is noted that with regard to insurance intermediaries licensing, the Government proposes to introduce a new Part in the ICO to lay down a statutory licensing framework which will replace the existing self-regulatory regime administered by the three self-regulatory organisations (i.e. the Hong Kong Confederation of Insurance Brokers, the Professional Insurance Brokers Association and the Insurance Agents Registration Board under the Hong Kong Federation of Insurers). It is proposed that insurance intermediary activities will be defined as "regulated activities" and the new Part will provide for offences of carrying on regulated activities without licence, five types of licences under two broad categories of insurance intermediaries, licence application and renewal procedures, a requirement for the appointment of responsible officers by authorised insurers, licensed insurance agencies and licensed insurance broker companies, and the establishment of a register of insurance intermediaries for public inspection.
It is also proposed that the IIA will be vested with powers of inspection and investigation and to impose disciplinary sanctions to regulate authorised insurers and insurance intermediaries. The Government also proposes to empower the IIA to delegate specified functions to the Hong Kong Monetary Authority for effective regulation of insurance intermediary activities carried out by banks.