| Regulatory Framework > Regulation
of Insurance Intermediaries |
|
To act as an insurance agent, a person is
required to be appointed by an insurer and registered with
the Insurance
Agents Registration Board ("IARB") set up by
The Hong
Kong Federation of Insurers ("HKFI"). An appointed
insurance agent shall not represent more than four insurers,
of whom no more than two shall be long term business insurers.
Under section 66 of the Insurance
Companies Ordinance (Cap.41) ("ICO"), an insurer
is required to keep a register of appointed insurance agents
and to make it available for public inspection at its registered
office or at a place approved by the Insurance Authority ("IA").
For this purpose, the IA has approved the registered office
of the HKFI
as the place where the register should be maintained and made
available for public inspection.
An insurer is required to give the IA details
of the registration and removal of its appointed insurance
agents within seven days of such registration or removal.
Alternatively, the insurer may provide such details to the
IARB,
and in so doing the insurer concerned is considered as having
complied with this requirement. Upon receipt of such notification
by the insurer, the IARB
shall update the register and notify the IA accordingly.
An insurer is required under section 67 of
the ICO to comply with the Code of Practice for the Administration
of Insurance Agents ("Code of Practice") which is
issued by the HKFI
and endorsed by the IA. The Code of Practice, which governs
the administration of insurance agents by insurers, will be
updated by the HKFI
from time to time to keep it in line with market developments.
Section 68 of the ICO specifies that an insurer shall be responsible
for the actions of its appointed insurance agents in their
dealings with clients in respect of the issue of insurance
contracts and related insurance business.
The Code of Practice specifies, among others,
the rules and procedures governing the registration and de-registration
of insurance agents, the power of the IARB
to handle complaints and require the insurers to take disciplinary
actions against their insurance agents, the fit and proper
criteria of insurance agents and the minimum requirements
of the agency agreement.
In particular, the Code of Practice provides for the following:-
- Register of appointed insurance agents, their responsible
officers and technical representatives - A register of appointed
insurance agents and a sub-register of insurance agents'
responsible officers and technical representatives shall
be kept and maintained for public inspection.
- Registration with the IARB
- An insurer must ensure that its agents are registered
with the IARB
whereas an insurance agent must ensure that its responsible
officer and technical representatives are registered with
the IARB.
- Representation of principals - An insurance agent is prohibited
from representing more than four insurers, of which no more
than two shall be long term insurers.
- Representation of agents - A responsible officer or technical
representative of an insurance agent is prohibited from
being a responsible officer or technical representative
of another insurance agent.
- Disciplinary procedures - The IARB
has disciplinary powers against insurance agents, their
responsible officers or technical representatives registered
with it. Disciplinary actions may include :
- issue a reprimand to an insurance agent, its responsible
officer or technical representatives;
- suspend or terminate the appointment of an insurance
agent, its responsible officer or technical representatives;
or
- such other actions as the IARB
thinks fit.
The IARB
issues Guidelines from time to time as to how it intends to
exercise its powers and fulfil its responsibilities under
the Code of Practice.
The Guidelines issued by the IARB
include the following:
These guidelines set out certain guidance
which if followed provide comfort to all concerned that all
possible steps are being taken to conduct business in good
faith and with integrity:
- on no account will insurance agents ask customers
to sign blank or incomplete forms and any alterations to
forms must be initialled by the customers,
- an insurance agent selling a life assurance policy will
ensure that the prescribed Customer Protection Declaration
form is completed, and
- insurers must establish control procedures to monitor
insurance agents' compliance with the Code of Practice.
These guidelines set out recommended payment
methods by customers:
- cheque should be written in favour of
the insurer, or
- credit card/direct deposit/bank should be transferred
from the customer's account to the insurer.
Any other method of payment or credit facilities
extended to an agent should be subject to clear rules set
out by the insurer designed to avoid the mixing of customers'
money with agents' personal funds.
These guidelines aim to ensure that no prospective
or current insurance agents, their Responsible Officers or
Technical Representatives shall hold themselves out as engaging
in the insurance agency business relating to an insurer before
the IARB confirms
their relevant registrations in writing by way of a Notice
of Confirmation of Registration.
|
