Banks have certain activities related to insurance, such as referrals, premium financing and trust arrangements. Under the new Section 64G of the Insurance Ordinance Cap. 41 (“Ordinance”), a person cannot carry on regulated activities without an insurance intermediary license.
Regulated activities include negotiating or arranging a contract of insurance, inviting or inducing a person to enter into, or make a material decision on, a contract of insurance, and giving regulated advice. Material decision and regulated advice refer to activities such as making an insurance application, renewing, canceling or assigning an insurance policy. Given the broad definition of regulated activities, certain insurance-related activities of the bank may be regarded as regulated activities.
The Insurance Authority has provided some guidance under the Explanatory Note in relation to the licensing requirements for banks under the new regime. However, whether an activity amounts to a regulated activity will depend on full factual context and this will need to be considered objectively.
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