Ethics 道德操守

Professional Trust and Hong Kong's Regulatory Framework 專業信任與香港監管架構

Ethical conduct applies to every insurance product sold by licensed insurance intermediaries. Insurers and clients rely on intermediaries to act honestly; misconduct can damage both the firm represented and public confidence in Hong Kong's insurance profession.

Licensed insurance agents must follow the Code of Conduct for Licensed Insurance Agents, while licensed insurance brokers must follow the Code of Conduct for Licensed Insurance Brokers. A licensed insurance broker company must additionally comply with the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Cap. 41L), which are subsidiary legislation under the Insurance Ordinance (Cap. 41). [IA regulatory instruments](https://www.ia.org.hk/en/supervision/reg_ins_intermediaries/regulatory_instruments.html)

From 23 September 2019, the IA directly regulated all insurance intermediaries in Hong Kong and handled related complaints directly. The previous self-regulatory organisations were the Insurance Agents Registration Board, The Hong Kong Confederation of Insurance Brokers and the Professional Insurance Brokers Association.

For the historical period from 1 April 2021 to 31 March 2022, the IA received 1,196 complaints, with conduct accounting for the largest category. Remember this statistic together with its specified period.

Misrepresentation and Fraud 失實陳述與詐騙

In the insurance sales conduct context, misrepresentation centres on deliberately misleading a prospective client to secure a purchase. An example is an intermediary knowingly presenting investment returns as guaranteed when the product provides no such guarantee.

Fraud centres on an intention to deceive through false statements, false claims or concealment of important information. An intermediary who deliberately hides a client's current health condition to deceive the insurer illustrates this practice. The two practices can overlap, and fraud can involve concealment as well as spoken falsehoods.

Recognising Twisting 誘導轉保的判斷

To identify twisting, connect three factors: the intermediary uses misleading statements, withheld information or an incomplete comparison; this induces the client to replace existing life insurance with other life insurance; and the replacement disadvantages the client. A commission rebate is not a necessary feature.

For example, an intermediary may promote the new policy's advantages while deliberately omitting the existing policy's surrender charge, causing a replacement that harms the client. A change of policy alone does not establish twisting: look for the connection between the misleading conduct, the replacement and the disadvantage.

Rebating and the Purchase Decision 回佣與投保決定

Rebating occurs when an insurance agent offers to return commission to attract a prospective client into buying a policy. The concern is that the immediate payment may overshadow the product's own risks and benefits and lead to an inappropriate decision.

Licensed insurance intermediaries must also comply with the relevant requirements of GL25: Guideline on Offering of Gifts. In a scenario, identify whether the payment comes from the agent's commission and is intended to induce a purchase; personal funding by the agent does not remove the need to consider regulatory requirements. [GL25: Guideline on Offering of Gifts](https://www.ia.org.hk/en/legislative_framework/files/GL25_English.pdf)