Insurance Brokers

Authorization of Insurance Brokers

A person intending to act as an insurance broker shall either seek authorization from the Insurance Authority ("IA") or apply to become a member of a body of insurance brokers approved by the IA. An insurance broker who is directly authorized by the IA or is a member of an approved body of insurance brokers is subject to the same statutory requirements.

For an insurance broker who is a member of an approved body of insurance brokers, he is also subject to the membership regulation of his own professional body which is approved by the IA.

In order to be authorized as an insurance broker or be admitted as a member of an approved body of insurance brokers, a person, apart from being fit and proper to be an insurance broker, has to satisfy the minimum requirements specified by the IA with regard to:

• qualifications and experience;
• capital and net assets;
• professional indemnity insurance;
• keeping of separate client accounts; and
• keeping of proper books and accounts.

The detailed requirements are set out as follows:

• Requirement on qualifications and experience - An insurance broker or his Chief Executive is required to have attained the age of 21; to be a Hong Kong Permanent Resident or a Hong Kong Resident whose employment visa conditions, if any, do not restrict him from being engaged in insurance broking business and to have minimum education standard of Form 5 or equivalent. He is additionally required to have:
  • an acceptable insurance qualification and a minimum of 2 years' experience in the insurance industry occupying a management position, and if he intends to be engaged in the long term (including linked long term) insurance broking business, passed the Investment-linked Long Term Insurance paper of the Insurance Intermediaries Qualifying Examination ("IIQE") recognized by the IA, unless exempted ; or
  • a minimum of 5 years' experience in the insurance industry of which 2 years is at management position and passed the relevant papers of the IIQE recognized by the IA unless exempted.
• Requirement on capital and net assets - An insurance broker shall maintain a minimum capital and net assets value of not less than HK$100,000.
• Requirement for professional indemnity insurance - An insurance broker is required to maintain a professional indemnity insurance with a minimum limit of indemnity for any one claim and in any one insurance period of 12 months. The minimum limit of indemnity shall be a sum equal to two times the aggregate insurance brokerage income in the immediate preceding period of twelve months, subject to a minimum of HK$3 million and a maximum of HK$75 million. Cover in excess of HK$75 million may of course be arranged on a voluntary basis, if the insurance broker so decides.
• Requirement to keep separate client accounts - An insurance broker is required to keep client monies in a designated client account separate from his own monies.
• Requirement to keep proper books and records - An insurance broker is required to keep proper books and accounts and other records as will sufficiently explain the transactions and enable a proper audit to be made.

Please click here [PDF] to read the Minimum Requirements for Insurance Brokers specified by the Insurance Authority.

Register of Insurance Brokers

The IA is required to maintain a register of authorized insurance brokers as well as a register of approved bodies of insurance brokers. The registers are open for public inspection.

An approved body of insurance brokers is required to maintain a register of its members which contains information required by the IA in respect of each member for public inspection.

Audit Requirement

An insurance broker authorized by the IA is required to submit to the IA annual audited financial statements together with an auditor's report certifying the insurance broker's continued compliance with the minimum requirements. An insurance broker who is a member of an approved body of insurance brokers is required to submit to the body annually audited financial statements with an auditor's report certifying the member's continued compliance with the minimum requirements. The approved body of insurance brokers is required to submit annually to the IA an auditor's report on the continued compliance with the minimum requirements by its members.

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