ComplianceOne Insurance Newsletter – February 2026

The topics discussed in this monthly newsletter are as follows: 

Regulatory Updated

1. Anti-Money Laundering and Sanctions Updates

   
   

Market News

2. Hong Kong’s Single-Family Offices total surpasses 3,380, Contributing Approximately $12.6 Billion Annually to Hong Kong’s Economy

3. IA Launches Public Consultation on Enhancements to the Risk-based Capital Regime

   
   

Enforcement News

4. IA Reprimands and Fines Three Licensed Broker Companies HK$429,000 Total for Failures in AML/CFT Requirements

Regulatory Updated

1. Anti-Money Laundering and Sanctions Updates

In early March 2026, the Insurance Authority (“IA”) issued several key circulars and updates on anti-money laundering (“AML”) and counter-financing of terrorism (“CFT”) matters, accessible via the dedicated IA page for 2026 AML circulars. These updates primarily relate to international sanctions regimes, United Nations measures, and Financial Action Task Force (“FATF”) guidance, requiring prompt attention from authorized insurers and licensed insurance intermediaries (especially those handling long-term business).

SIGNIFICANCE:

These updates reinforce Hong Kong's alignment with global standards set by the FATF and UN, helping to safeguard the insurance sector against money laundering, terrorism financing, and proliferation risks.

Insurance companies, agents, and brokers need to be aware of immediately updating their name screening databases to include the latest UN Security Council Consolidated List, FATF High-Risk Jurisdictions subject to a Call for Action, and FATF Jurisdictions under Increased Monitoring, while conducting enhanced due diligence on high-risk elements, incorporating emerging risks into assessments, and ensuring staff training for ongoing compliance.

Timely compliance is essential to avoid regulatory breaches, reputational damage, or enforcement actions by the IA. With increasing scrutiny on virtual assets and cyber fraud, these notices underscore the need for robust screening, risk assessment, and staff training to maintain policyholder protection and industry integrity in an evolving threat landscape.

Markets News

2. Hong Kong’s Single-Family Offices total surpasses 3,380, Contributing Approximately $12.6 Billion Annually to Hong Kong’s Economy

On 10 February 2026, the Financial Services and the Treasury Bureau (“FSTB”) and Invest Hong Kong (“InvestHK”) jointly released findings from the Market Study on the Family Office Landscape in Hong Kong, commissioned by InvestHK and conducted by Deloitte. The study estimates that 3,384 single-family offices were operating in Hong Kong as of the end of 2025, marking an increase of 681 offices (over 25%) since the end of 2023.

Two major affects to the Hong Kong Market:

• Economic Impact: Single-family offices contribute approximately HK$12.6 billion annually to the local economy through operating expenditures alone and directly employ over 10,000 full-time professionals. When including multifamily offices and supporting service providers, the overall economic benefits are expected to be substantially greater.

• Hong Kong’s Wealth Management Position: As of end-2024, assets under management in Hong Kong reached approximately HK$35 trillion (about US$4.5 trillion). The city ranked second globally in the number of ultra-high-net-worth individuals as of June 2025, reinforcing its status as a leading destination for family offices.

Key highlights from the announcement and study:

Comments from Representatives of FSTB and InvestHK

Mr Christopher HUI, Secretary for Financial Services and the Treasury, attributed the sustained growth to Hong Kong’s advantages under the “one country, two systems” framework, including its role as a leading global asset and wealth management hub with predictable environment, connectivity to the mainland and the world, and supportive policies.

Ms Alpha LAU, Director-General of Investment Promotion at InvestHK, highlighted strong overseas interest (particularly from Europe and Southeast Asia) in Hong Kong’s flexible investment environment, no geographical restrictions on investments under the preferential tax regime, high privacy (no general licensing requirement for single-family offices), and tax incentives.

SIGNIFICANCE:

The surge in single-family offices underscores Hong Kong’s strengthened position as Asia’s premier wealth and asset management hub, attracting diverse global capital through targeted policy enhancements, tax competitiveness, privacy protections, and strategic connectivity. The substantial annual economic injection of HK$12.6 billion (via operating expenditures) and direct employment of over 10,000 professionals highlight the sector’s growing role in driving local financial services growth, job creation, and broader ecosystem development. With forthcoming tax expansions (including digital assets) and ambitious growth targets, these developments reinforce Hong Kong’s appeal to ultra-high-net-worth families amid global shifts toward sustainable wealth management and intergenerational planning, further solidifying its status as a trusted international financial centre.

3. IA Launches Public Consultation on Enhancements to the Risk-based Capital Regime

On 11 February 2026, the IA launched a public consultation on proposed amendments to the Insurance (Valuation and Capital) Rules (Cap. 41R), applied for authorized insurers only (excluding licensed insurance agencies and licensed insurance broker companies). This follows a comprehensive review of the Risk-based Capital (“RBC”) Regime, which commenced on 1 July 2024.

The proposed changes seek to refine the framework while preserving strong prudential safeguards for policyholders. Key areas include:

• Preferential capital treatment for eligible infrastructure investments, to encourage financing that supports local economic development.

• Revisions to the required capital amounts for general business lines.

• Technical adjustments for indexed universal life (“IUL”) business.

• Specific treatments for crypto assets (with a proposed 100% risk charge in related discussions) and specified stablecoins, reflecting evolving exposures to digital assets.

These refinements aim to enhance Hong Kong’s position as a competitive global risk management hub, attract more international activity, and align capital requirements with market innovations and emerging asset classes.

The consultation paper is available on the IA website. Interested parties, including insurers, intermediaries, industry associations, and the public, are invited to submit comments by 10 March 2026 via:

• email to rbc@ia.org.hk; or

• by post to the IA office at 19/F, 41 Heung Yip Road, Wong Chuk Hang, Hong Kong.

SIGNIFICANCE:

This consultation represents a forward-looking adjustment to the RBC Regime, balancing innovation with stability. By incentivizing infrastructure investments and clarifying treatment of modern assets like crypto and stablecoins, the proposals support Hong Kong’s strategic goals in sustainable development and digital finance. They also reinforce the city’s attractiveness to multinational insurers and investors, while ensuring continued robust protection for policyholders amid global regulatory evolution. Industry participants are encouraged to engage actively to shape these important enhancements.

Enforcement News

4. IA Reprimands and Fines Three Licensed Broker Companies HK$429,000 Total for Failures in AML/CFT Requirements

On 4 March 2026, the IA announced disciplinary action against three licensed insurance broker companies for breaches of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).

The affected companies are:

The contraventions include:

• Failure to establish and maintain effective internal procedures for conducting customer due diligence (“CDD”).

• Failure to determine whether customers were politically exposed persons (“PEPs”) or whether a person was purporting to act on behalf of the customer.

• Failure to keep relevant records as required.

In addition to the companies, three related individuals were reprimanded for their involvement in these compliance failures.

The total pecuniary fine imposed across the three broker companies amounts to HK$429,000. The IA noted that the companies have since implemented effective remedial actions to address the identified deficiencies.

SIGNIFICANCE:

No evidence of actual money laundering or terrorist financing was reported in connection with these cases, but the breaches highlight gaps in frontline controls that could expose the insurance sector to misuse. Broker companies play a critical role as the primary point of contact with policyholders and are essential in preventing the insurance industry from being exploited for financial crime, thereby protecting Hong Kong's reputation as an international financial centre.

This enforcement action reinforces the IA's ongoing priority on robust AML/CTF compliance among insurance intermediaries, particularly broker companies. As intermediaries interact directly with clients, effective CDD, PEP screening, and record-keeping are foundational to preventing financial crime and maintaining trust in Hong Kong's insurance market. The penalties serve as a reminder that even post-remediation cooperation does not eliminate accountability for systemic control weaknesses. With increasing regulatory scrutiny on financial crime risks, licensed entities are urged to review and strengthen their AML/CTF frameworks to avoid similar outcomes, including potential reputational damage, higher supervisory intensity, or escalated sanctions in future cases.

[End of ComplianceOne Insurance Newsletter – February 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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