The Hong Kong Insurance Authority’s latest Conduct In Focus report for 2025 reports a higher complaint volume than in 2024, continued concentration of cases in conduct-related categories, new commission-spreading rules for participating policies, clarified expectations for agent managers’ accountability, persistent early-stage intermediary attrition, mixed public feedback on intermediary services, and enforcement actions over anti-money laundering and counter-terrorist financing (AML/CFT) deficiencies at broker companies.

Complaint trends and conduct risk indicators

In 2025, the IA received 1,173 complaints, an increase of 19.9% from 978 in 2024. The year-on-year rise reached 33% in the first half before easing to around 20% for the full year. Over a longer period, the 2025 number is close to the 1,163 complaints recorded in 2019 and 21% below the 1,494 complaints in 2020. The IA sets these figures against the expansion of the Hong Kong insurance market, noting that total gross premiums in the first three quarters of 2025 reached HKD637 billion, above the full-year 2019 figure of HKD567 billion.

The IA states that it closed 85% of complaints received in the first half of 2025 within six months, compared with its service pledge to close at least 80% in that timeframe. Complaint categories remained concentrated in three areas: “Conduct” (26%), “Representation of Information” (19%), and “Business or Operations” (25%). Complaints relating to “Conduct” and “Representation of Information,” which together made up 45% of the total, were largely associated with intermediaries’ pre-contract sales practices and post-sale servicing.

Commission reforms and CPD as regulatory tools

The IA links these conduct patterns to incentive structures for intermediaries, particularly for participating long-term policies. With effect from Jan. 1, 2026, all participating policies with regular premium payment terms are subject to commission-spreading requirements. Under the rule, no more than 70% of total commission may be paid in the first policy year, and the remaining commission must be spread evenly over the following five years or over the premium payment term, if shorter.

The measure is targeted at participating policies because they represent more than 80% of new office premiums in Hong Kong’s long-term market and have historically used front-loaded commission arrangements. The IA states that where commission on a participating policy is all paid up front, it “results in over‑prioritisation of selling (sharpening the risk of aggressive selling and miss‑selling) whilst also underprioritizing post-sales servicing.” It adds that requiring commission to be more spread over the policy period helps “incentivising appropriate advice, quality sales activities, and meaningful ongoing services,” and that over time it expects the measure to “help ameliorate certain key drivers underlying complaints relating to conduct and misrepresentation of information.” On intermediary competence, the IA reiterates its expectations around continuing professional development (CPD). For the assessment period from Aug. 1, 2024, to July 31, 2025, it records a 99.9% CPD compliance rate. According to the report, this outcome “reflects the industry’s strong commitment to maintaining professional standards (whilst also leaving 0.1% room for improvement next year).”

Intermediary demographics, attrition, and licence choices

The report updates intermediary trend data first published in earlier Conduct In Focus issues, focusing on age, turnover and licence duration. The average age of insurance intermediaries increased from 39.9 years in December 2020 to 42 years in October 2023, and then to 42.5 years by December 2025. Technical representatives (broker) had an average age of 43.8 years and “continue to be the most (how should we put this) mature cohort among all licence types,” unchanged from October 2023. The average age of individual insurance agents rose from 42.1 to 42.7 over the same period, while technical representatives (agent) increased from 40.6 to 41.1. The latter remain the youngest group overall, driven in part by bank-based technical representatives (agent) whose average age is 39.0.

On turnover, the IA notes that of approximately 90,000 individual licences granted to first-time entrants between September 2019 and December 2025, around 53,000 (59%) remained active as at December 2025, down from 62% at end-2024. Focusing on those whose licences were newly granted between September 2019 and December 2022, the IA states that 38,400 new licences were issued and “of these, only around 30%, or around 11,700, remain licensed more than three years later, as at December 2025.” This represents “a further (considerable) decline from the 35% retention rate reported last year.”

The IA comments that “the data also indicates persistently high early‑stage attrition: in both periods reviewed, more than 50% of new licences were revoked within the first three years.” From a conduct perspective, it describes the figures as “a significant red flag, particularly regarding the risk of orphan policies in the life insurance sector.” The report notes that orphan policies remain a key driver of complaints and states that the commission-spreading mechanism for participating policies “helps mitigate conduct risks arising from rapid turnover in the intermediary population.”

The IA also reviews licence duration choices following the introduction, from Sept. 23, 2024, of shorter-term options for new individual applicants. New applicants may choose 1- or 2‑year terms alongside the standard 3‑year licence, which carries a higher total fee but a lower annualised cost. Renewal applicants may choose 2‑ or 3‑year terms. Despite high early attrition, 71% of approximately 31,000 new individual applicants between September 2024 and December 2025 chose a 3‑year licence; 19% opted for one year. Among roughly 22,000 renewal applications in the same period, 84% selected a 3‑year licence and 16% a 2‑year term.

The IA writes that “the current trend, with 71% of applicants selecting 3‑year licences, points to higher initial commitment,” but also notes that “historical records show that 52% of past cohorts did not maintain their licences for the full three years.” It suggests that these statistics reflect “the persistence of the traditional distribution mindset… based on the simple formula of ‘the more intermediary the better’,” and raises the possibility of “a recruitment formula which says, ‘the fewer but more committed and well-trained intermediaries, the better for sustainable business’.”

Public perception of intermediaries and conduct expectations

The IA sought to understand public views on intermediary services by holding two focus group sessions in 2025 on “Services of Licensed Insurance Intermediaries,” with members of the public sharing past experiences. Participants who reported positive experiences mentioned personalised advice based on financial situations, needs, and goals; useful product comparisons and analysis; responsiveness to queries; and support during claims handling. They indicated that such experiences led to a positive perception of both the intermediaries and the sector and that they were willing to recommend intermediaries who met these expectations. Participants who were critical referred to intermediaries who did not fully understand the products they recommended, provided misinformation or caused confusion, were hard to reach after the sale, or did not clearly explain fees or contract conditions at the outset. Several comments focused on communication during claims, where delayed updates or unclear explanations were seen as damaging to trust.

The IA states that this feedback “does not represent the IA’s view and/or standpoint,” but relates it to the standards in its Codes of Conduct. In the preface, the code “sets out fundamental principles of professional conduct which buyers of insurance are entitled to expect in their dealings with licensed insurance [intermediaries], reinforcing the bedrock of trust which serves as the foundation for a healthy, competitive and efficient insurance market.” The IA adds that “in our view, there is a direct correlation between professional conduct being displayed by licensed insurance intermediaries and increasing public trust in the insurance market.”

AML/CFT enforcement and operational lessons for brokers

The report also summarises recent AML/CFT disciplinary actions involving licensed insurance broker companies carrying on long-term business. The IA reprimanded three broker companies and three individuals and imposed fines totalling HK$429,000 for contraventions of the Anti‑Money Laundering and Counter‑Terrorist Financing Ordinance (Cap. 615).

The IA identifies several types of deficiencies:

Two broker companies allowed technical representatives (TRs) to verify customer identification documents on dates different from those recorded, or without marking verification dates, contrary to their own AML procedures.
In two policy applications, a broker company incorrectly identified family trusts as policyholders, even though board resolutions from a company stated that it would hold and pay for the policies as employee fringe benefits.
One broker’s internal manual did not set out clear procedures for verifying both the identity and authority of persons purporting to act on behalf of a customer (PPTA), contributing to a case in which a TR signed as PPTA based on untrue assertions of authorisation.
One broker company failed to establish and maintain effective procedures to determine whether customers were politically exposed persons (PEPs), resulting in PEP screening not being carried out for certain applications.
Another broker company did not retain customer identification records for some policy applications, despite an internal requirement to keep such records for at least five years.

The IA states that these omissions amount to material non‑compliance with AMLO and its Guideline on Anti‑Money Laundering and Counter‑Terrorist Financing (GL3). It notes that no actual ML/TF activities were detected in the cases and that the broker companies have taken remedial steps, including updating internal manuals, and have accepted the disciplinary actions. In determining penalties, the IA says it had regard to its Guideline on Exercising Power to Impose Pecuniary Penalty in Respect of Anti‑Money Laundering and Counter‑Terrorist Financing (GL3A).

The report reiterates that market participants engaging in long-term business must maintain “proportionate, well-designed, and effectively implemented AML/CFT procedures to accord with their obligations under the AMLO, not just on paper, but in day-to-day operations.” It states that “failures in these areas by insurers, broker companies, or agencies that are subject to the AMLO, may result in proportionate disciplinary action” and comments that “every person serving in the insurance market must play their part in safeguarding the integrity and reputation of Hong Kong as an international financial centre.”