On 28 Feb 2025, the HKMA circulated the Insurance Authority's Practice Note on illustration rate caps for participating policies, requiring authorized insurers to use aligned minimum expectations in benefit illustrations to prevent aggressive investment assumptions. The Practice Note mandates accurate, non-misleading illustrations at point of sale and prohibits the use of rate-cap-exempt re-illustrations for unethical selling practices.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
Hong Kong Grant Scheme for Insurance Linked Securities
A new grant scheme aims to position Hong Kong as a global hub for the issuance of insurance linked securities by subsidising issuance costs
Insurance M&A – Updates to Change of Control Requirements for Hong Kong Insurers
Updates to change of control provisions in the Insurance Ordinance require approvals for minority and majority shareholder controller changes
SPOTLIGHT ON
FAMILY OFFICES
Introduction
On 28 Feb 2025, the Hong Kong Monetary Authority (HKMA) circulated a Practice Note issued by the Insurance Authority (IA) on illustration rate caps in benefit illustrations for participating insurance policies, establishing minimum expectations for authorized insurers to prevent overly aggressive investment assumptions and ensure policyholders' reasonable expectations are met.
Key Requirements
The Practice Note mandates that authorized insurers must apply illustration rate caps in benefit illustrations for participating policies at the point of sale, ensuring illustrations are adequate, accurate, complete, and non-misleading. It explicitly prohibits licensed insurance intermediaries from using re-illustrations (which fall outside the rate caps) for aggressive or unethical selling practices, and confirms that all benefit illustrations provided by intermediaries to customers at the point of sale must comply with these requirements.
View the full article:Source
