The tides of change: Macau’s insurance intermediaries face a new era

Carlos Eduardo Coelho

Partner at MdME

On July 31, 2024, the Macau Legislative Assembly gave the green light to the Insurance Intermediary Activities Ordinance (IIAO), setting the stage for a major overhaul in the insurance landscape.

As this new legislation gears up to take effect on August 1, 2025, replacing the old Insurance Intermediaries Ordinance of 1989, we are here to break down what this means for Macau’s insurance intermediaries and the industry at large.

The Biggest Change: A License to Operate with Greater Confidence One of the biggest changes likely to be felt by Macau’s Insurance Intermediaries is the new licensing system. An extended validity period from one to two years is more than a number—it’s a vote of confidence in the stability and reliability of the sector. This change, along with a revised fee structure—which shall be determined based on factors like the type of intermediary, scale of business, and complexity of supervision—is set to reduce the administrative burden for intermediaries’ activities.

Among Key Things Intermediaries Should Be Aware Of: The Principal’s Expanded Role The role of ‘principals’ is expanding, and with it, their responsibilities. Principals must now ensure not only the suitability of their agents but also maintain continuous oversight of their operations. This includes appointing a Responsible Officer (RO), who will act as the linchpin in ensuring compliance with the new regulatory standards.

Staying in Sync with Regulatory Pulse: Prior Approval and Post-Notification Intermediaries should be aware that the IIAO demands a higher degree of transparency and proactive communication with the Regulator (AMCM). Any changes in company structure or personnel that could impact the integrity of insurance operations must be promptly reported.

Prior approval is necessary for events like changes in qualified shareholding of brokers and in controlling shareholding of corporate agents or changes to the appointed RO, Designated Representative or Risk Analyst. Post-notification is required for events like change of principal and termination of relationship with a principal, changes to the directors or any other change to the information that AMCM requires for supervisions purposes. 

Assessing suitability – The New Benchmark for Industry Players Another big change to the industry is the introduction of the suitability assessment. The comprehensive suitability assessment under the IIAO is more than a box-ticking exercise. It is a thorough evaluation of an individual’s or entity’s ability to meet the high standards of the insurance sector. This assessment is a clear indicator of the AMCM’s intent to ensure that only the fittest and proper entities operate within the industry.

Expanded Oversight: A Safer Harbor for the Insurance Sector With the IIAO, the AMCM’s oversight powers are not just extended; they are strengthened. The ability to issue guidelines and conduct inspections is a clear signal that the AMCM is committed to maintaining the highest standards of integrity and transparency in the insurance sector.

Sanctions with a Stronger Bite: Deterring Non-Compliance The IIAO’s sanctions are not just punitive; they are preventative. With a tiered system of fines (from MOP 5,000 to MOP 10,000,000.00) and additional sanctions like public condemnation, the AMCM is equipped to deal with non-compliance swiftly and firmly.

The IIAO represents a significant leap forward for Macau’s insurance sector. The new changes aim to enhance licensing structure, strengthen supervision, establish clearer responsibilities for principals, and ensure compliance with international standards. It is a call to action for intermediaries to rise to the challenge, embrace the change, and emerge stronger.