Insurance Licensing in Hong Kong

Incorporate a Hong Kong Company

The applicant must be a company incorporated in Hong Kong under the Companies Ordinance (Cap. 622). Register with the Companies Registry (CR). You can use a company formation agent — incorporation typically takes 1-4 business days electronically.

• Business Registration Certificate (BR) required
• Company name should reflect insurance broking activity
• Registered office address must be in Hong Kong
• Incorporation cost: approximately HK$1,500-5,000 (including government fees)

Meet Minimum Paid-up Share Capital: HK$500,000

The company must have a minimum paid-up share capital of HK$500,000. This capital must be actually paid in — not just authorized. The IA will verify this through bank statements and audited accounts.

Meet Net Asset Requirements

The company's net assets must not be less than its paid-up share capital (i.e., at least HK$500,000). Net assets = total assets minus total liabilities. This ensures the company is solvent and has a financial buffer. The IA monitors this through annual audited financial statements.

Arrange Professional Indemnity Insurance (PII)

Every insurance broker company must maintain Professional Indemnity Insurance (PII). The minimum cover is typically HK$3 million per claim (as stipulated by the IA's guidelines and the Insurance Ordinance). PII covers the broker against claims arising from professional negligence, errors, and omissions.

• Minimum: HK$3,000,000 per claim (some insurers offer higher limits)
• Annual premium typically ranges from HK$15,000 to HK$50,000 depending on business size, claims history, and scope
• Must be maintained continuously — any lapse is a serious breach
• The PII policy must be issued by an authorized insurer
• A copy of the PII certificate must be provided to the IA annually

Set Up a Separate Client Trust Account

Insurance brokers handle client premiums. By law, you must open a separate client trust account with an authorized institution (bank licensed by the HKMA). This account holds premiums collected from clients before remitting them to insurers.

• Client money must be segregated from the broker's own funds
• The account must be designated as a "client account" or "trust account"
• The broker must not use client money for its own purposes
• Regular reconciliation of the trust account is required
• Auditors must confirm trust account compliance in annual audits

Appoint at Least One Responsible Officer (RO)

Every licensed broker company must have at least one Responsible Officer (RO) who is individually licensed by the IA. The RO is responsible for overseeing the company's insurance broking activities and ensuring compliance.

• The RO must be a director or key person in the management of the company
• Must meet the fit and proper requirements (see Section 4 below)
• Must have adequate experience in the insurance industry (typically 5+ years)
• Must be based in and ordinarily resident in Hong Kong
• If the sole RO departs, the company must appoint a replacement or cease operations

RO Must Pass Required IIQE Papers

The Responsible Officer must pass the relevant Insurance Intermediaries Qualifying Examination (IIQE) papers depending on the type of business:

See the detailed IIQE section below for more information on each paper.

Prepare Business Plan, Compliance Manual & Internal Controls

The IA expects a professional, well-structured operation. You will need to prepare:

• Business Plan — covering your target market, business strategy, revenue projections, and organizational structure
• Compliance Manual — documenting your compliance procedures, including anti-money laundering (AML) policies, know-your-client (KYC) processes, and complaint handling procedures
• Internal Controls — procedures for premium handling, record keeping, conflict of interest management, data protection, and staff supervision
• Organizational Chart — showing reporting lines and responsibilities
• AML/CFT Policies — compliant with the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO)

Submit Application to the IA

Submit the completed licence application to the Insurance Authority along with all supporting documents. Required documents typically include:

• Completed application forms (Form IIA, available on IA website)
• Certificate of Incorporation and Business Registration Certificate
• Memorandum and Articles of Association
• Bank confirmation of paid-up share capital
• PII certificate or cover note
• Trust account bank confirmation
• RO's licence application (Form IIB) with IIQE certificates
• Business plan, compliance manual, internal control documents
• Personal references and curriculum vitae for directors and RO
• Application fee (payable to the Insurance Authority)

IA Review and Approval (3-6 months)

The IA will review the application, which typically takes 3 to 6 months. During this period:

• The IA may request additional information or clarifications
• Background checks on directors, controllers, and the RO will be conducted
• The IA may interview the RO or directors
• If approved, the licence is granted and published in the IA's public register
• If refused, the applicant may appeal to the Insurance Appeals Tribunal

Ongoing Compliance Obligations

Getting the licence is just the beginning. Once licensed, you must continuously comply with:

• Annual returns filed with the IA
• Audited financial statements submitted annually
• Maintaining minimum paid-up capital and net asset requirements at all times
• Renewing PII every year with adequate coverage
• CPD hours for all licensed individuals (minimum 10 hours/year)
• Maintaining the client trust account and keeping proper records
• Notifying the IA of any material changes (directors, controllers, RO, address, etc.)

See the detailed ongoing obligations section below.