ComplianceOne Insurance Newsletter –

September 2026

The topics discussed in this monthly newsletter are as follows: 

Enforcement News

1. IA Orders FWD Life (富衛人壽) to Pay HK$19.5 Million for Shortcomings in Anti-Money Laundering Controls

2. IA Prohibits Seven Insurance Intermediaries for up to 42 Months for Misappropriating Client Premiums Totalling HK$714,870

Regulatory Updates

3. IA Publishes Conduct in Focus Issue 13 on Marketing, Self-Referral and Responsible Officer Standards

   
   

Market News

4. IA Hosts Belt and Road Panel on Hong Kong as a One-Stop Risk Advisor for Mainland Enterprises Going Global

5. A Chairman and Chief Executive Officer Meet the National Financial Regulatory Administration

Enforcement News

1. IA Orders FWD Life (富衛人壽) to Pay HK$19.5 Million for Shortcomings in Anti-Money Laundering Controls

On 24 September 2026, the Insurance Authority (“IA”) ordered FWD Life Insurance Company (Bermuda) Limited (“FWD Life”) (富衛人壽) to pay a pecuniary penalty of HK$19.5 million. The action follows an on-site inspection under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (“AMLO”) and was taken under section 21(2) of AMLO.

The IA found that, during periods between April 2012 and September 2024, FWD Life contravened various AMLO requirements. The shortcomings were in payor identification on third-party payments, controls on potentially suspicious transactions including cash payments, data capture and screening of politically exposed persons (“PEPs”), and customer due diligence on particular transactions.

The material findings in the Statement of Disciplinary Action are set out below:

FWD Life’s own payment-acceptance procedures required a copy of the bank-draft application so the payor could be identified. In practice those procedures did not come into effect, or had been superseded. FWD Life has since implemented remedial measures. The IA acknowledged the early acceptance of the findings. After enhanced reviews, FWD Life confirmed there had been no onboarding of non-eligible customers as a result of delayed detection.

SIGNIFICANCE:

Every authorized insurer carrying on long term business must keep effective anti-money laundering and counter-terrorist financing controls. A written procedure that the business does not actually use is the failure the IA priced at HK$19.5 million. For intermediaries, the exposure is in how premiums are collected: a Premium Payment Declaration that does not match the true payor, and unexplained split cash that is booked rather than escalated, are the samples the inspection used.

2. IA Prohibits Seven Insurance Intermediaries for up to 42 Months for Misappropriating Client Premiums Totalling HK$714,870

The IA has prohibited seven insurance intermediaries from acting as insurance intermediaries for up to 42 months, after finding that they misappropriated client premium payments totalling HK$714,870.

What the IA Found

Some of the methods of misappropriation include the agent having falsely represented to the client that the premium was used to purchase a policy when the agent had misappropriated it. To conceal the agent’s conduct, she bought a policy a year later by using the client premium payments to renew the original policy. In another case, the agent ceased to be the client’s servicing agent, but he continued to assist the client with his policies and misappropriated the premium payments, causing them to lapse. Unaware the policies had lapsed, the client continued to pay further premium payments to the agent, who misappropriated it.

See below table for more details:

Source: Register of Licensed Insurance Intermediaries

SIGNIFICANCE:

The IA said the conduct seriously impugned the individuals’ fitness and properness and severely affected policyholders. It reminded the public to review their portfolios regularly and to pay premiums only through channels designated by the insurer.

Regulatory Updates

3. IA Publishes Conduct in Focus Issue 13 on Marketing, Self-Referral and Responsible Officer Standards

On 30 September 2026, the IA published Conduct in Focus Issue 13, by circular to chief executives of authorized insurers and responsible officers of licensed insurance agencies and broker companies. The edition covers complaint statistics for the first half of 2026, responsible marketing, a social-media rumour about the professional-investor exemption, the Key Person in Control Function for Intermediary Management, self-referral arrangements, responsible-officer fit and proper assessments, insurance fraud, and recent enforcement on agent-manager accountability.

***English version: Conduct in Focus - September 2026

***中文版: 監管通訊- 2026年9月

Significant Topics and Shares

1) Responsible officers, tenure is now a conduct signal.

Between 23 September 2019 and 30 June 2026, the IA approved 3,201 individuals as responsible officers of licensed insurance agencies and broker companies. The edition treats short tenure, particularly at broker companies writing long-term business on a referral model, as a conduct-risk signal. Candidates from that segment are more likely to be interviewed before approval, and a pattern of short tenures can lead to a supervisory review or an on-site inspection.

The IA restates the role of the Key Person in Control Function for Intermediary Management. Oversight of intermediaries is treated as a control function that has to be staffed and used, not a title on the return.

2) Agent-manager accountability

Two recent cases are used to show that a manager who facilitates misconduct, rather than stopping it, is within the IA’s reach. For both cases, the IA found grounds to question fitness and properness.

• In February 2026 the IA banned a former agent after she directed a downline to give the regulator a misleading response, following the discovery that the downline had submitted a false academic certificate to an insurer.

• In May 2026 an agent manager provided her login credentials to an unregistered downline, who then completed a Mandatory Provident Fund consolidation application that the client later said was not authorised.

SIGNIFICANCE:

Issue 13 does not create a new rule. It shows how the IA is applying rules already in force. Four points should be on the compliance file this month. A fee paid back to a customer, or to a family member, under a referral agreement is undocumented rebating and is prohibited; three broker companies have already had licence-renewal conditions imposed for weak referral controls, including a bar on new referral business. Short responsible-officer tenure, particularly at a broker company writing long-term business on a referral model, is a supervisory signal and may lead to an interview, a review, or an on-site inspection. A digital campaign built on selective statistics that repeatedly misleads customers is expected to be amended or withdrawn. Classifying a customer who is not a professional investor as one, in order to front-load commission, sits outside the Practice Note.

Insurers and appointing principals should treat referral controls, responsible-officer continuity and marketing governance as one conduct risk, and should confirm that the Key Person in Control Function for Intermediary Management is exercising oversight, not holding a nominal appointment.

Markets News

4. IA Hosts Belt and Road Panel on Hong Kong as a One-Stop Risk Advisor for Mainland Enterprises Going Global

On 9 September 2026, the IA hosted a panel at the Belt and Road Summit, themed “Architecting a Global Risk Strategy: Hong Kong as the End-to-End Risk Advisor for Globalizing Enterprises”.

The session brought corporate executives and risk experts together to discuss the risk spectrum facing Chinese Mainland enterprises expanding overseas, the tools available to manage those risks, and how Hong Kong can act as a one-stop risk advisor.

Source: IA Press Release

Mr. Clement LAU (“LAU”), Executive Director, Policy and Legislation of the IA, and moderator of the panel, said the Belt and Road Initiative has moved from standalone infrastructure projects to the operation of global business ecosystems, and that enterprises need proactive and consolidated risk management to deal with that complexity. LAU said Hong Kong’s depth in insurance solutions and professional advisory services puts it in a position to support Mainland enterprises from risk assessment through to tailored mitigation.

SIGNIFICANCE:

The panel set out Hong Kong’s risk-management toolkit, and how those solutions can be scaled for large enterprises and for small and medium-sized enterprises. Panellists also looked at the city’s advisory cluster, maritime law, trade finance and insurance, as the basis of a seamless one-stop offering, and at what Hong Kong still needs if it is to remain the preferred risk advisor for Mainland enterprises going global.

5. IA Chairman and Chief Executive Officer Meet the National Financial Regulatory Administration

On 10 September 2026, the IA announced that Mr. Stephen YIU (“YIU”), Chairman of the IA, and Mr. Clement CHEUNG (“CHEUNG”), Chief Executive Officer of the IA, visited the National Financial Regulatory Administration (“NFRA”) (國家金融監督管理總局) in Beijing the previous week. They met Mr. XIAO Yuanqi (“XIAO”), a member of the NFRA CPC committee and Vice Minister of the NFRA, on the afternoon of 3 September 2026.

Source: IA Press Release; NFRA Press Release 2026-09-22

The two sides exchanged views on how Hong Kong’s insurance industry can be further integrated into overall national development, and on regulatory priorities and collaboration.

SIGNIFICANCE:

The meeting is short on public detail, but it sits next to the Belt and Road panel of the day before. Cross-boundary insurance, captive and specialty capacity, and supervisory cooperation with the NFRA are the channels through which the “risk management hub” line becomes operating business. Intermediaries with Mainland-visitor or outbound-enterprise books should expect that cooperation to show up later in product, referral and conduct expectations, not only in communiqués.

[End of ComplianceOne Insurance Newsletter – September 2026]

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The Newsletter is for general information purpose only and is not intended to constitute legal or other professional advice.

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