The Hong Kong Insurance Authority (IA) has released its latest Conduct In Focus report, offering a comprehensive overview of recent complaint patterns, regulatory developments, and industry practices affecting insurers and intermediaries across Asia.
The September 2025 edition provides data-driven insights for insurance professionals navigating a changing market landscape.
The IA recorded a total of 593 complaints in the first half of 2025 (H1 2025), representing a 33% increase compared to the same period in 2024.
The majority of these complaints pertained to operational matters, such as policy cancellations, surrenders, renewals, and administrative processes.
The authority noted that early surrenders of long-term insurance policies often require additional documentation, which can lead to policyholder dissatisfaction. However, these requirements are intended to protect consumers and ensure compliance with anti-money laundering regulations.
The IA emphasised that clear communication about the necessity of such procedures, combined with efficient processing, can help reduce grievances.
“If this is coupled with high efficiency in processing the information once received and actioning the surrender, the level of grievance would be replaced by better understanding,” the report stated.
A notable portion of complaints also stemmed from policy lapses and challenges in reinstating lapsed coverage. The IA observed that policyholders are increasingly attentive to their insurance arrangements, reflecting a shift toward greater consumer engagement.
The increase in complaints was also linked to a rise in inquiries from Mainland China Visitors (MCV) who purchased policies in Hong Kong during previous visits. These policyholders often seek clarification on policy performance and terms, particularly as annual statements are issued.
Despite the recent uptick, the IA highlighted a longer-term positive trend. The number of complaints in the first half of 2025 was 24% lower than the 778 complaints recorded in the same period of 2020, suggesting that overall conduct standards are improving as the market stabilizes post-pandemic.
The Conduct In Focus report discusses the evolving role of specialist run-off insurance agencies. As insurers exit certain business lines or markets, these agencies are increasingly tasked with managing legacy portfolios.
The IA outlined licensing and outsourcing requirements for such agencies, stressing the importance of strong governance, system adequacy, and experienced leadership.
The IA also addressed the responsibilities of insurance brokers when advising clients on offshore insurance products.
Brokers must provide full disclosure of the risks and limitations associated with offshore coverage, including differences in regulatory oversight, claims handling, currency risk, legal frameworks, tax implications, and the financial standing of the offshore insurer.
Brokers are required to conduct suitability assessments and maintain thorough records of all advice provided, particularly when clients opt for offshore solutions against recommendations.
With the growing use of digital platforms for insurance sales, the IA has incorporated system assessments into its conduct inspections.
The report identifies common deficiencies in digital sales systems and offers recommendations to enhance compliance and consumer protection.
Following the cessation of unsolicited telemarketing for Mandatory Provident Fund (MPF) products, the IA noted that complaints related to insurance cold calls remain limited and are primarily related to nuisance rather than fraud.
The authority encourages insurers to maintain robust controls and adhere to industry codes of practice for telemarketing while continuing to monitor developments in this area.
A recent three-month mystery shopping initiative by the IA’s Enforcement Division evaluated insurance-related roadshow activities.
All intermediaries engaged were found to be properly licensed and presented products in a professional manner.
However, some used self-created promotional materials and spreadsheets that had not been approved by their principals, occasionally omitting key information about product guarantees.
The IA recommends that principals implement comprehensive governance frameworks for roadshow activities, including prior approval processes, clear internal guidelines, ongoing monitoring, data protection measures, and proper record-keeping.
Prompt responses to identified misconduct and the sharing of anonymized case studies are advised to reinforce good practices among intermediaries.
The IA concluded that while complaint volumes may fluctuate in the short term, the industry must remain vigilant in upholding professional conduct standards.
The authority reaffirmed its commitment to fairness, efficiency, and transparency in complaints handling and supervision.
Insurers and intermediaries are expected to prioritise policyholder interests throughout the insurance lifecycle, from sales to ongoing servicing.
Insurance professionals are encouraged to review the full Conduct In Focus report and related regulatory materials available on the IA’s website for further guidance.
