Media365
Hong Kong insurance companies and brokers from Wednesday are barred from paying excessive referral fees to unlicensed individuals, as the city’s insurance regulator bolsters efforts to curb misconduct and enhance customer protection.
The city’s Insurance Authority has put a 50 per cent cap on commissions for referral fees in life insurance policies, a move that provides long-term life protection and dividends to policyholders, according to the regulator’s circular.
The regulation takes effect at the start of the National Day holiday – also known as the “golden week” – when millions of mainland Chinese visitors visit Hong Kong, which also serves as an opportune time for many of them to buy new insurance policies in the city.
“The Insurance Authority expressed concern about business models that could incentivise unlicensed selling of long-term insurance policies, particularly those adopted by licensed insurance broker companies relying solely or heavily on referrers,” the regulator said in the circular.
“Market feedback indicates that the current situation, if left unchecked, could breed misconduct, erode public confidence and impair market sustainability.”
