Insurance brokers and agents: roles, regulation and choosing support

“Insurance intermediary” includes brokers and agents. Both connect the public with insurers, sell or arrange insurance, provide product and contract information and help with claims where needed. However, the policy itself is a contract between the policyholder and the insurer, not the intermediary. Applicants should understand the terms and the intermediary’s role.

Regulation in Hong Kong Both brokers and agents are regulated by the Insurance Authority under the Insurance Ordinance (Cap. 41). The Authority licenses intermediaries and handles complaints about misconduct, aiming to protect existing and prospective policyholders and support a stable insurance market.

Roles and representation The article cites figures at 30 June 2020 of more than 800 licensed broker companies, over 10,000 licensed broker technical representatives, more than 2,000 licensed agency organisations and over 80,000 licensed individual agents.

A broker represents the policyholder and compares products from different insurers to find a suitable option. An agent represents an insurer in selling its products. The article notes that an individual or company cannot be both a licensed broker and a licensed agent at the same time.

It distinguishes employed agents working for one insurer, sometimes receiving a salary plus commission and bonuses, from independent agents who may represent up to four insurers, no more than two of which are life insurers. It characterises broker follow-up as potentially slower and insurer-agent document handling as potentially faster; actual service varies.

Qualification and licensing The Insurance Authority’s fit-and-proper assessment considers education and professional qualifications, experience, reputation, character, reliability and financial status. Applicants should read the licensing guidance and submit through the relevant insurer or licensed broker company. Individual applicants can apply through the Insurance Intermediaries Connect portal or the applicable paper form.

Verifying an intermediary The Register of Authorised Insurers and Register of Licensed Insurance Intermediaries allow consumers to check organisations and professionals.

Commission The original article describes commission as a principal source of income for both groups. It contrasts a payment after a policy takes effect, potentially subject to clawback after early termination or reduction, with a percentage-of-premium model that declines over time. Its illustration gives approximately 50% of first-year premium, reducing from year two to zero around years five or six; actual arrangements depend on the product and insurer.

Choosing an intermediary Look for someone who understands your protection and financial needs rather than simply increasing cover to earn more. Good listening, empathy, tailored advice and timely after-sales service matter. Ask questions about any existing policies and whether adjustments are needed to gauge knowledge. Look for sincerity, courtesy and patient explanations rather than boasting. Experience can bring practical familiarity, while younger professionals may offer enthusiasm and frequent contact; either can provide good service.