The Hong Kong Insurance Authority (HKIA) is to assume responsibility for imposing fines on any regulated professional or firm in the special administrative region.
Its remit has widened following Hong Kong’s Federation of Insurers transferring the function of licencing intermediaries to the HKIA.
Following a consultation that took place in October 2018, the insurance regulator set out the guidelines on which the fines will be based.
According to the rules, penalties will be capped at either HK$10m (£1m, $1.3m, €1.1m) or three times the amount of the profit gained, or loss avoided, by the licensee.
The sanctions will come into force on 23 September 2019, when the HKIA takes over from the Federation of Insurers.
No formula
“The [HKIA] will not adopt a formula since a formula would not give rise to ‘effective, proportionate and fair’ pecuniary penalties and would be contrary to the IA’s principle-based approach,” the regulator said.
“Instead, the [HKIA] will refer to the consideration factors as set out in the guidelines.
“For the [HKIA] to be fair to a regulated person who is to be the subject of a pecuniary penalty under the new regime, we would need to take into account the facts and circumstances of his/her individual case in setting the penalty.”
In addition, when a regulated individual or firm is handed a fine, the regulator will publish its decision and the amount of the penalty.
