Regulatory Alerts2021-09-30
Added · Updated
Joint Inspection on the Use of Premium Financing to Take Out Long Term Insurance Policies in Hong Kong
The Insurance Authority and the Hong Kong Monetary Authority conducted a joint inspection revealing significant deficiencies in how insurers and intermediaries assess customer affordability for premium-financed long-term insurance policies. The regulators found that many institutions failed to account for loan repayment obligations in financial needs analyses, provided inadequate risk disclosures regarding collateral assignment, and engaged in misleading sales practices. These findings highlight critical gaps in training, documentation, and consumer protection that require immediate remediation to prevent customer over-leveraging and financial loss.