The System

The self-regulatory system for insurance intermediaries, i.e. insurance agents and brokers, is supported by legislation which is contained in Part X of the Insurance Companies Ordinance (Cap. 41) ("ICO"). The regulation for insurance intermediaries has been in operation since 30 June 1995. It defines the distinct roles of an insurance agent and an insurance broker and requires them to be appointed or authorized respectively in accordance with the relevant provisions of the ICO.

Under section 65 of the ICO, a person is prohibited from holding himself out as an insurance agent or an insurance broker unless he is properly appointed or authorized. A person is also prohibited from holding himself out as an appointed insurance agent and an authorized insurance broker at the same time. It is an offence under the ICO for an insurer to effect a contract of insurance through, or accept insurance business referred to it by, an insurance intermediary who has not been properly appointed or authorized.