On Jul. 5, HKIA issued note that outlines standards re ILAS policies.
HKIA issued practice note on application of requirements in regulatory framework to specific services provided by licensed insurance brokers on investment choices, premium allocations under investment-linked assurance scheme (ILAS) policies.
Practice Note
Outlines requirements for 3 specific regulated activities, being execution-only services; advisory investment services; and discretionary investment management services.
Licensed broker companies must adhere to governance, control standards, possess investment knowledge, expertise, especially for advisory, discretionary services.
Annex A specifies qualification, experience criteria for personnel providing advisory and discretionary services, applicable to ILAS policies issued on or after Oct. 1, 2024.
In addition, the practice note also guides that existing advisory, discretionary services on ILAS policies issued before Oct. 1, 2024 can continue until Jul. 31, 2027.
This is subject to additional continuing professional development (CPD) requirements.
Annex B sets minimum expectations for corporate governance, controls, and procedures related to these services, applicable to all ILAS policies from Oct. 1, 2024.
In addition, policy holders must receive transparent information on service terms, remuneration, fees, and their ability to terminate services without penalty; these services are separate from ILAS policy features, ensuring informed decision-making.
Effectiveness
The practice note is effective from Oct. 1, 2024.
Nov. 2024 CPD Requirements
On Nov. 8, 2024, HKIA said brokers unable to meet new competency requirements by Oct. 1, 2024 may continue servicing ILAS policies under grandfathering arrangements until Jul. 31, 2027, provided that they complete two additional CPD hours annually.
Course titled course for insurance brokers on grandfathered ILAS policies is launched.
First run of course is on Nov. 26, 2024; open to all interested insurance intermediaries for earning standard CPD hours, not just those under grandfathering arrangements.
HKIA also reminded of insurance brokers responsibility re keeping of proper records.
