Jurisdiction - Hong Kong
Hong Kong – ILAS: Intermediaries’ Remuneration Disclosure.

30 September, 2014


On 30 July 2014, the Office of the Commissioner of Insurance (OCI) issued a Guidance Note on Underwriting Class C Business.  The Guidance Note applies to all authorised insurers underwriting Class C business, more commonly known as Investment-Linked Assurance Schemes (ILAS) business.


The Guidance Note requires insurers to carry out a review at the product design stage to ensure that the product meets the “fair treatment of customers” principle.  The Guidance Note also discusses product documentation, the sales process and remuneration of intermediaries.  It stipulates that indemnity commission, or any standing arrangement that offers advance payment of commission, is strictly prohibited.


On 5 August 2014, the OCI issued an ILAS Intermediaries’ Remuneration Disclosure Guide on Calculation Methodology and Disclosure Format (Disclosure Guide) pursuant to the Guidance Note.  Insurers are required to adhere strictly to the Disclosure Guide, which covers the calculation of remuneration paid to intermediaries for the sale of ILAS and disclosure of this remuneration to end customers.  The Disclosure Guide requires the following template disclosure language, to appear in bold and no smaller than font size 12, in the important facts statement: 

Intermediaries’ Remuneration: If you take up this ILAS policy, the (agent/broker firm/bank) will on average receive remuneration of HKD x.x per HKD 100 of the premium that you pay.


The Guidance Note comes into effect on 1 January 2015 and is available on the OCI website. It complements the Securities and Futures Commission’s recent requirements on the internal product approval process for issuers of publicly-offered ILAS (available here) and follows earlier regulatory initiatives on the sale of ILAS products.




For further information, please contact:


Mary Nieto, Deacons

[email protected]


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