Part 5: Regulatory Framework in HK
Paper V — Investment-linked Long Term Insurance · Part 5: Regulatory Framework in HK
Further reading: Regulatory Framework in HK study notes →
What is the primary responsibility of the Insurance Authority (IA)?
Why: The Insurance Authority (IA) is the statutory regulator of Hong Kong's insurance industry, responsible for regulating insurers and insurance intermediaries. Its responsibilities include licensing, ongoing supervision, setting regulatory standards, and enforcement actions. Regulating banking is the responsibility of the HKMA; regulating the securities market is the responsibility of the SFC.
Which of the following statements about Regulators are correct? I. As ILAS involves an investment component, the SFC has regulatory oversight over ILAS-related intermediaries who sell through banks or licensed corporations II. The SFC is fully responsible for regulating ILAS products and their sellers III. The SFC has no regulatory role in relation to ILAS
Why: ILAS is primarily regulated by the Insurance Authority (IA), but due to its investment component, the SFC also has regulatory oversight over ILAS-related intermediaries who sell through banks (licensed corporations). When banks sell ILAS through financial advisors, the relevant personnel may need to hold both an IA insurance licence and an SFC Type 1 (dealing in securities) or other licence. The regulatory overlap arises because ILAS has characteristics of both insurance and investment products.
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