HKIA Conduct In Focus Report


On Aug. 3, HKIA issued new report on complaints and topical issues.


  • HKIA published the latest edition of its Conduct in Focus report, presenting statistics on complaints received in the first half of 2022, and giving practical guidance to firms.
  • Follows HKMA and HKIA Apr. 2022 issued premium financing circulars, see #133837.
  • Complaints
  • HKIA received 533 complaints during period from Jan. 1, to Jun. 30 2022, a reduction of 26% as compared to the same period in 2021, with most being classed as Conduct.
  • This refers to complaints from the sales process, the handling of client’s premiums or monies, cross-border selling, unlicensed selling, and all fraud and forgery allegations.
  • The second highest level of complaints was on Business or Operations, referring to underwriting, premium adjustment, or internal management process of the insurer.
  • Practice
  • In this section, HKIA looked at importance of regulated entities self-reporting material breaches and incidents, and how it is an integral part of robust corporate governance.
  • It also underlined recent disciplinary actions which have penalized undesired practices, including mishandling client monies, and misleading statements in e-mail marketing.
  • Also, non-compliance with Continuing Professional Development (CPD) requirements.
  • Policyholders
  • In Policyholder Corner, HKIA examined premium financing, or taking out a loan to pay premiums under an insurance policy, where benefits under policy will exceed loan cost.
  • It highlighted risks policyholders should be aware of before using such arrangements.
  • To protect policyholders, HKIA has recently introduced an Important Facts Statement – Premium Financing, which will be completed by brokers to highlight associated risks.
  • This will need to be used from Jan. 2023 onwards, whenever any policyholder is considering funding the purchase of an insurance policy using premium financing.

Regulators HKIA
Entity Types IB; Ins
Reference Rp, PR 8/3/2022; ESG
Functions Claims/Accelerated Benefits; Client Money; Compliance; Financial; Fraud; Legal; Market Conduct; Operations; Product Administration; Registration/Licensing; Reporting; Risk; Sales Practices; Suitability; Treasury; Underwriting
Countries Hong Kong; Cross-Border
Category
State
Products Corporate; Insurance; Insurance-Casualty; Insurance-Health; Insurance-Life; Insurance-Property; Loan
Regions AP
Rule Type Guidance
Rule Date 8/3/2022
Effective Date 8/3/2022
Rule Id 144890
Linked to Rule :133837
Reg. Last Update 8/3/2022
Report Section International

Last substantive update on 08/04/2022