Insurance Intermediaries 保險中介人

Role of Intermediaries and the Licensing Regime 中介人的角色及發牌制度

Insurance intermediaries link insurers with prospective policy holders. They explain products, analyse customers' needs, arrange cover, and help with policy servicing and claims afterwards. In Hong Kong a person must be licensed to carry on a regulated activity in relation to insurance contracts, such as inviting or inducing someone to enter into a contract or giving advice on insurance. Doing so without a licence is an offence.

Before 23 September 2019, agents were registered with the Insurance Agents Registration Board set up by the Hong Kong Federation of Insurers. Brokers were either authorised by the Insurance Authority (then the Commissioner of Insurance) or were members of the Hong Kong Confederation of Insurance Brokers or the Professional Insurance Brokers Association. From that date self-regulation ended, and the Insurance Authority (IA) now licenses and regulates all intermediaries directly under the Insurance Ordinance (Cap. 41).

Applicants must be fit and proper and normally must pass the relevant papers of the Insurance Intermediaries Qualifying Examination. Once licensed, they must follow the codes of conduct issued by the IA and meet continuing professional development requirements.

Licensed Insurance Agents 持牌保險代理人

An insurance agent is the agent of its appointing insurer: it acts for the insurer, not for the customer. There are three types of licence: the licensed individual insurance agent (an individual appointed directly by an insurer), the licensed insurance agency (a firm or company appointed by an insurer, such as a bank), and the licensed technical representative (agent) (an individual who carries on regulated activities on behalf of an insurance agency, such as a bank employee).

Because the agent acts for the insurer, the ordinary principles of agency make the insurer responsible for what the agent does within its authority, whether express, implied or apparent.

An individual agent or agency may be appointed by no more than four authorized insurers, and no more than two of them may be long term insurers. Agents must tell customers which insurers they represent, so the customer knows whose side they are on.

Licensed Insurance Brokers 持牌保險經紀

An insurance broker is the agent of the policy holder or prospective policy holder. It acts for the customer, comparing products from different insurers, negotiating terms and arranging cover. There are two types of licence: the licensed insurance broker company, and the licensed technical representative (broker), an individual who carries on regulated activities on behalf of a broker company.

Because brokers act for clients and must act in their interests, broker companies face extra financial requirements. They must keep a minimum paid-up capital and net assets, hold professional indemnity insurance, keep client money in separate client accounts, and maintain proper books and records.

Key Differences Between Agents and Brokers 代理人與經紀的主要分別

The key difference is whom they represent: an agent acts for its appointing insurer, a broker acts for the customer. As a result, the appointing insurer is generally responsible for an agent's mistakes, while a broker bears responsibility for its own mistakes. This is why brokers must hold professional indemnity insurance.

An agent can sell only the products of its appointing insurers, while a broker can approach the whole market. A person cannot hold an insurance agent licence and an insurance broker licence at the same time, so that customers are never left unsure which side the intermediary is on.