A firm may have its licence suspended if it does not have an RO at any time. We use cookies to offer you a better browsing experience. They include virtually all core insurance processes, such as arranging, negotiating or inviting persons to enter into insurance policies, giving advice on applying for insurance, exercising a right under an insurance contract, and making and settling insurance claims. By going to the ICPs which have provided the basis of the new legislation, however, legal practitioners can at least encourage insurers to set some common-sense benchmarks around the principle of “customer fair treatment” when rolling out new systems, sales processes and products. The Ordinance has also established statutory conduct requirements applicable to licensed insurance intermediaries (section 90 of the Ordinance) as well as statutory conduct requirements which are applicable to insurance agencies (section 91 of the Ordinance) and insurance brokers (section 92 of the Ordinance). ROs will be required to use best endeavours to put in place proper controls and procedures to ensure compliance with the conduct requirements specified in the Insurance Companies Ordinance. Nevertheless, the system changes its demands on insurers, making it a priority for them to update policy documentation and communicate it in advance to policyholders, whilst advising Finance, IT and business teams on the minutiae of the detail. Insurance regulation in Hong Kong. Insurance agents, advise on, or arrange, insurance contracts in or from Hong Kong as the agent of an insurer. Does the security underpinning the platform ensure customer data is adequately protected? Indeed, we see this same mechanism being used by other industries (eg, the new Manager-In-Charge regime instituted by the Securities & Futures Commission in its circular of 16 December 2016). A regulated activity under the Ordinance includes the act of negotiating or arranging a contract of insurance, the act of inviting or inducing, or attempting to invite or induce, a person to enter into a contract of insurance, the act of inviting or inducing, or attempting to invite or induce, a person to make a material decision or the act of giving advice. For those who have followed the passage of the legislation, which has seen the old Insurance Companies Ordinance be given a 21st century make-over to become the Insurance Ordinance, the empowerment of the new Insurance Authority marks the end of a very long road. A request which includes a description of the attributes of the proposal which ensure fair treatment of customers, demonstrates that the business is benchmarking itself against the right standards from the outset. The ICPs are, after all, the international standards with which the Insurance Ordinance seeks to align. Insurance regulation in Hong Kong: a paradigm shift. A letter of appointment, however, setting the parameters and expectations for the role, not only correctly documents the appointment, but gives it the appropriate status within the corporate governance framework. These are the 'Insurtech Sandbox' and 'Fast Track'. These are used to track user interaction and detect potential problems. The Insurance Ordinance (Cap. The two-year hiatus is intended to give the industry breathing space to prepare, but the time lag creates its own problems as the industry is already undergoing significant change before the new requirements are made clear. Section 90 of the Ordinance requires that insurance intermediaries act honestly, fairly, in the best interest of the policy holder and with integrity while exercising a level of care, skill and diligence that may reasonably be expected of a person who is carrying out a regulated activity.