Guideline for Insurance Broker License Application in Hong Kong

I. Common License Types (Classes of Business)

Hong Kong insurance broker licenses are categorized by the classes of business the applicant intends to operate. Applicants must specify the class(es) when applying:

Important Note: Selling Mandatory Provident Fund (MPF) schemes is not covered under the insurance broker license classes. Individuals engaging in MPF intermediary activities must register separately with the MPFA under the Mandatory Provident Fund Schemes Ordinance.

II. Purpose of the License

A licensed insurance broker company acts as the agent of the client and is authorized to conduct the following intermediary businesses in Hong Kong:

• Providing insurance consultation and risk assessments for clients.
• Assisting clients in arranging insurance policies (including personal protection such as critical illness, medical, and savings insurance; and corporate benefits such as group medical and life schemes).
• Representing clients in handling claims and follow-ups.
• Designing property and liability insurance solutions for enterprises.
• Assisting cross-border clients in configuring Hong Kong insurance products.

Key Difference between a Broker and an Agent: A broker is the client's agent, representing the client's interests. An agent is the insurer's agent, representing the insurance company in selling products. Regulations strictly prohibit the same entity from acting simultaneously as both an insurance broker and an insurance agent.

III. Personnel Requirements

3.1 Responsible Officer (RO)

Every licensed insurance broker company must appoint at least one Responsible Officer (RO) approved by the Insurance Authority (IA). An RO must meet the following requirements:

In addition, the RO must meet the "Fit and Proper" criteria set out in the IA's guidelines, including competencies in corporate governance, internal controls, and risk management frameworks.

3.2 Business Representatives

Business Representatives are individuals who represent the insurance broker in providing insurance advice, negotiating, or arranging insurance contracts with clients. Individual license holders must meet the following requirements:

• Form 5 graduation or HKDSE with 5 subjects at Level 2 or above (including Chinese or English, and Mathematics).
• Pass the relevant papers of the Insurance Intermediaries Qualifying Examination (IIQE):
• Paper II: General Insurance
• Paper III: Long Term Insurance
• Paper V: Investment-Linked Long Term Insurance
• Meet the "Fit and Proper" criteria (reputation and financial standing).

3.3 Continuing Professional Development (CPD)

IV. Application Process and Timeline

4.1 Application Process

Step 1: Preliminary Planning and Structure Setup

• Determine the company structure, business scope, and shareholder arrangements.
• Identify and secure qualified Responsible Officers (ROs).

Step 2: Open an "Insurance Intermediaries Connect" Account

• The applicant broker company must authorize a representative to submit an application to open a Commercial Entity Applicant account via the IA's e-Service portal, "Insurance Intermediaries Connect" (IIC).

Step 3: Submit the License Application

• Submit the application electronically via the IIC portal.
• Key forms to be completed include:
• Form A4: Application for an Insurance Broker Company License.
• Form A3: Application for Approval of Proposed Responsible Officer(s).
• Forms S5/S6: Declaration of Directors/Controllers.

Step 4: IA Review and Approval

• The IA assesses the overall completeness of the application.
• The applicant is notified to pay the license fees.

Step 5: License Issuance

• The license is valid for 3 years.

4.2 Application Timeline

Upon receipt of all required documents, the IA's processing times are as follows:

The above times are counted from the date the applicant has submitted all required documents and do not include incomplete or returned applications.

Overall Application Cycle: For a completely new license application from scratch, the full process typically takes approximately 6 months.

V. Costs

5.1 IA License Application Fees

Effective from 23 September 2024, the IA charges the following application fees:

Fees can be paid via the IIC portal using credit card (Visa/MasterCard), AlipayHK, WeChat Pay, or FPS (Faster Payment System).

5.2 Company Operating Costs

Applying for a new license from scratch: The overall cost is approximately less than HKD 800,000, including:

• Arrangement of suitable licensed Responsible Officers.
• Recommendation letters from multiple insurance companies.
• Basic office leasing.
• Administrative staffing.

Other ongoing costs:

• Professional Indemnity Insurance (PII): Minimum indemnity limit is the greater of 2 times the brokerage income of the past 12 months or HKD 3 million (capped at HKD 75 million).
• Minimum Net Assets: A corporate insurance broker must maintain a minimum net asset value and paid-up capital of at least HKD 500,000 at all times.
• Segregated Client Accounts: Client funds must be held in separate client bank accounts.

VI. Other Core Requirements

Under the Insurance Ordinance (Cap. 41), insurance broker companies must also comply with the following requirements: