On 3 October 2013, the Government announced that it was establishing a working group to facilitate the smooth transition of the existing self-regulatory regime for insurance intermediaries to a new regime administered by an independent Insurance Authority (IIA). “Independent” because, in contrast to the existing Office of the Commissioner of Insurance, the IIA will be financially and operationally independent of the Government.
Under the current regulatory regime, the conduct of insurers and insurance intermediaries is carried out by self-regulatory organisations including the Hong Kong Federation of Insurers, the Insurance Agents Registration Board, the Hong Kong Confederation of Insurance Brokers and the Professional Insurance Brokers Association.
Under the new regulatory regime, the regulatory functions of the self-regulatory organizations will be removed and the IIA will assume responsibility for setting conduct requirements for insurance intermediaries and for licensing, investigating and disciplining insurance intermediaries.
The proposed structure and scope of responsibilities of the IIA are broadly similar to the role of the Securities and Futures Commission (SFC) in relation to the regulation of brokers, advisers, asset managers and other securities market intermediaries. Indeed, many of the terms used, such as “regulated activities” and “responsible officer”, would be familiar to SFC-licensed corporations.
The Government has indicated it intends to introduce enabling legislation for the new regulatory regime in the 2013-2014 legislative year, with the aim of establishing the IIA in 2015.