Hong Kong’s Insurance Authority (HKIA) has signalled further enforcement against referral-related misconduct in the insurance distribution market.
The regulator outlined its stance in a comment on 12 July, saying it had imposed conditions on the licence renewals of two broker companies in early June, requiring them to stop accepting referral business after identifying weaknesses in their controls.
“These actions are not isolated initiatives and we will not end from there,” acting head of conduct supervision Alan Wu said. “Should similar irregularities be identified in the market, we will respond promptly with proportionate and decisive regulatory action to restore market order.”
The authority said it is monitoring compliance through operational data, on-site inspections and targeted spot checks, with a focus on conduct including illegal referrals and cross-boundary solicitation.
It has also rolled out three measures for participating policies since July 2025: illustration rate caps, referral fee expectations for broker companies from October 2025, and a commission spreading mechanism for intermediaries from January 2026.
Beyond action against individual firms, HKIA is also seeking to stop intermediaries with misconduct records escaping consequences by moving between employers or financial sectors, a practice it terms the ‘rolling bad apple’ phenomenon.
This month, HKIA and the Hong Kong Monetary Authority launched a cross-sector reference-checking arrangement, covering more than 110,000 long-term insurance intermediaries across approximately 1,000 insurance institutions and banks.
Separately, the Hong Kong Federation of Insurers runs its own reference-checking scheme for individual agents, launched in September 2024 with HKIA’s support and later extended to insurance agencies and broker companies earlier this year.
The IA added that it plans to review the framework and explore further integration of reference checks across the insurance and banking sectors.
