Regulatory Alerts2025-02-28
Added · Updated
Practice Note on Illustration Rate Caps in Benefit Illustration for Participating Policies
The Insurance Authority issues this Practice Note to supplement GL16 and GL28 by establishing minimum expectations for illustration rate caps on participating policies to prevent overly aggressive investment assumptions. Authorized insurers must cap the Customers' Internal Rate of Return at 6.0% for Hong Kong Dollar products and 6.5% for other currencies in all point-of-sale benefit illustrations, including those generated by digital tools. These caps apply to new business illustrations but exclude re-illustrations of in-force policies, with the requirements commencing on 1 July 2025.