Hong Kong Insurance Authority Responds to Cross-border Insurance: Continues to Combat Market Misconduct and Maintains Communication with Relevant Mainland Ministries

May 29th, according to Yicai, regarding the compliance issues of mainland residents purchasing Hong Kong insurance, the Hong Kong Insurance Authority responded today, stating that the Hong Kong Insurance Authority and relevant mainland ministries have maintained close contact and communicated on regulatory issues, including illegal cross-border sales. Under current regulations, the entire sales process of Hong Kong life insurance must be conducted within Hong Kong, and licensed insurance intermediaries in Hong Kong are not allowed to solicit insurance business in the mainland. The principal (i.e., insurance company, insurance brokerage company, or insurance agency) has the responsibility to establish and implement effective internal control procedures to ensure that intermediaries conduct regulated activities legally and compliantly. The above response mentioned that regarding mainland residents purchasing insurance in Hong Kong, the Hong Kong Insurance Authority has implemented additional regulatory requirements since 2016, specifically stipulating that when mainland residents purchase insurance in Hong Kong, they must sign an additional "Important Information Statement" to ensure that the entire sales process of the policy must be conducted within Hong Kong, and all application documents must also be signed within Hong Kong. In addition, insurance companies must also collect relevant supporting documents (such as entry document records, etc.) to prove that the mainland customer was indeed in Hong Kong at the time of application.