Hong Kong insurance regulator vows crackdown on rule-breakers

[HONG KONG] Hong Kong’s insurance regulator is intensifying oversight and preparing to penalise companies that evade recent curbs on broker fees and policy rates, said its chief executive officer.

The Insurance Authority has detected signs of companies circumventing tighter rules introduced in 2025, which were designed to curb unrealistic return projections, unsuitable sales practices and outsized commissions, CEO Clement Cheung said Monday (Jun 15).

“We have monitored for a period of time and saw signs,” he said on the sidelines of the agency’s artificial intelligence symposium. “You can expect our actions in due course. Just watch.”

The proactive stance comes amid broader efforts by Beijing to curb capital outflows, which are channelled through offshore online brokers and bank accounts in Hong Kong.

Wealthy mainland Chinese have long flocked to the Asian financial hub to buy insurance policies, as a strategy to accumulate foreign currency and manage wealth.

In 2024, new premiums generated from mainland visitors reached HK$62.8 billion (S$10.3 billion), accounting for 28.6 per cent of the total.

The regulator in 2025 halted the publication of sales statistics for mainland Chinese visitors, citing the need to “conduct a comprehensive review of the scope and criteria concerning data collection on non-local policyholders”.

Cheung said that previous interventions, including a 2005 crackdown on illicit underground insurance sales and a 2016 restriction on premium payments via UnionPay cards, were executed in coordination with mainland authorities.

By contrast, a 2024 joint operation targeting unlicensed broker sales was conducted entirely via local enforcement, alongside Hong Kong’s anti-graft body.

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“We have learned our lesson,” Cheung said. “It’s better to take the initiative to address issues that might trigger Chinese concern, so we can have better control over the scope, timing and force, and maintain better communication with the market.

“When it gets to a point that warrants mainland coordination, our own voice will be smaller and the shock to the market will be bigger.”

While the regulator aims to maintain a supportive business environment for insurers, its primary mandate remains safeguarding policyholder interests and ensuring fair treatment, he noted. “It is our duty.” BLOOMBERG