How Is the Hong Kong Insurance Industry Regulated? Three Layers, and Who Governs What

Last updated 2026-08-11 · First published 2026-08-10

If you are preparing for IIQE Paper I, this chapter deserves extra time: Chapter 6, on the regulatory framework of the insurance industry, carries 21% of Paper I's weighting and 23.3% of expected lost marks, while its practice accuracy rate of 65.7% is the lowest of the paper's seven chapters (chapter-by-chapter data).

Second-highest weighting plus lowest accuracy — unfavourable at both ends — is why it ranks second in expected lost marks.

Start with "why regulate at all"

Insurance has a feature few other industries share: you pay first, and only much later find out whether the other side will deliver.

Buy a phone, and you know on the spot whether it works. Buy a policy, and you may not need it for thirty years — and by then: is the company still there? Can the person who explained the terms to you still be found? Did you truly understand what you were buying when you signed?

What regulation has to solve is the information asymmetry across that time gap. It breaks into three concrete jobs:

1. Insurers must be able to pay claims → solvency supervision
2. Those who sell insurance must explain things properly → intermediary conduct and qualifications
3. When something goes wrong, there must be somewhere to be heard → complaints and dispute

resolution

These three jobs correspond to the three layers of regulation.

The three layers

Layer one: legislation defines "who you are"

This point is often skipped over, yet it determines everything that follows.

A footnote to clause 1.1 of the examination handbook points the definition of "individual licensee" to the Insurance Ordinance (Cap. 41) — which is to say, which category of intermediary you belong to is defined by the Ordinance, not by your company's internal job titles.

Different capacities carry different scopes of business, and hence different papers to sit. Which kind of "principal" each of the three categories of individual licensee answers to can now be looked up.

For the precise definitions, go to the official database of Hong Kong legislation and read Cap. 41 itself — do not use an intermediary firm's marketing material as your source of definitions.

Layer two: the IA issues licences; the examination centre runs the examination

These two are constantly conflated, but they are two jobs done by two bodies:

• The Insurance Authority — licensing, supervision, enforcement
• The Vocational Training Council (VTC) — appointed by the IA as the examination body, with

day-to-day operation carried out by the PEAK examination centre (Handbook 1.2)

There is an explicit data channel between the two: the handbook's personal information collection statement sets out that the examination centre will verify candidates' results at the IA's request and report to the IA the particulars of candidates who have been disqualified (Handbook section 9: disqualification can last up to three years).

So "having passed the IIQE" and "holding a licence" are two different things — the former is a necessary condition for the latter, not a sufficient one. There is a separate page on this.

Layer three: the standards of day-to-day practice

This layer governs what happens after you are licensed: how to present products to clients, how to handle conflicts of interest, how to maintain your professional standard.

The difference from layer two: layer two governs whether you can enter the industry; layer three governs how you conduct yourself once you are in.

These details now have official sources

The first version of this page had an entire section on "the details we could not obtain first-hand documents for — so we did not write them": the IA website sat behind bot protection at the time, the text could not be retrieved, and we chose to leave blanks rather than paraphrase second-hand guides. The first-hand material is now in hand (the licence application notes on the IA website, Guideline 23 and Guideline 24, and the text of the Ordinance itself), so the blanks can be filled:

Licence types: there are three types of individual licence, each answering to one kind of "principal" — the first type is the licensed individual insurance agent, whose principal is an insurance company itself (an authorized insurer); the second type is the licensed technical representative (agent), whose principal is the agency the person belongs to; the third type is the licensed technical representative (broker), whose principal is the broker company the person belongs to. The prerequisites for applying include appointment by a principal, meeting the "fit and proper" requirements such as the education requirements in Guideline 23 (GL23), passing the relevant papers of the qualifying examination (unless exempted), and reputation and financial standing that are satisfactory. The full mapping and the application process have their own page.

Continuing Professional Development (CPD): an individual licensee must earn at least 15 CPD hours in each assessment period, of which at least 3 must fall within the "Ethics or Regulations" category (GL24, 2025 edition, effective from 1 August 2025). How the assessment period is defined, and which activities count, are covered in the dedicated CPD page.

Where the disciplinary provisions sit: Part XI of the Insurance Ordinance — section 81 is the basis for disciplinary action against a licensed insurance intermediary (including the power to revoke a licence or suspend it for a period), section 82 sets out the procedure for exercising that power, and section 83 is the guideline on the power to impose pecuniary penalties. For the complete list of possible sanctions, the text of the Ordinance prevails — this page gives the location of the provisions only and does not restate their content.

⚠️ Licensing and CPD are regulatory requirements and do change — the IA's current publications always prevail. For the originals: the Insurance Authority at www.ia.org.hk, and Cap. 41 of the Laws of Hong Kong in the official database of Hong Kong legislation (e-Legislation).

One more thing, free of charge: Handbook clauses 2.1.4 and 14.1 state that the syllabus and Study Notes for each paper are downloadable from both the examination centre's website and the IA's website. The examinable scope of this chapter is defined by those two documents.

For the examination

• **Chapter 6 carries 21% of Paper I's weighting and 23.3% of expected lost marks; its practice

accuracy rate of 65.7% is the lowest in the paper**

• Many candidates treat the regulatory framework as pure memorisation and leave it to the end —

but on the data it is the paper's second-largest source of lost marks

• The suggested order is 3 → 6 → 2

(full ranking and method)

• The content of this chapter changes as the regime changes — always work from the current

official syllabus, not old materials

⚠️ The accuracy rate mentioned on this page is a practice accuracy rate, not a pass rate; the two are not convertible. The sample is 9 candidates and 7,914 answers in total (4,057 on Paper I) — still a small sample.

Sources and currency

The division of labour between the examination centre and the IA, the pointer for the definition of "individual licensee", and the disqualification and reporting mechanism are taken from the handbook for the Insurance Intermediaries Qualifying Examination (the edition covering the paper-based and computer-screen examination modes), clauses 1.1–1.2 and their footnotes, section 9 and the appendices, applicable from 1 September 2025, obtained on 2026-08-09. The licence types, the mapping to principals and the application prerequisites are taken from the licence application notes on the Insurance Authority website (transcribed on 2026-08-11; currency follows the pages current at ia.org.hk); the "fit and proper" education requirements are in the IA's Guideline 23 (GL23). The CPD requirements are taken from the IA's Guideline 24 (GL24) (2025 edition, effective from 1 August 2025). The location of the disciplinary provisions is taken from the Insurance Ordinance, Cap. 41 of the Laws of Hong Kong (verified consolidated text on e-Legislation, as at 2025-05-23). The passage on why regulation has to exist is generally accepted insurance-regulation reasoning, organised and written by Mange — it is not a quotation from the Ordinance. Chapter weightings are taken from the publicly available syllabus and study-note contents; answering statistics as at 2026-08-09.

Mange does not own, and does not claim to own, copyright in any official examination material; the content on this page is written by Mange. Nothing on this page constitutes legal advice, nor is it a promise about any examination outcome. The regulatory regime changes over time — the official publications of the Insurance Authority and the PEAK examination centre always prevail.