Ready for speed? Insurance Authority to offer licensing fast track for online-only insurers
Insurance Authority pledges to cut licensing delays for online-only insurers, trimming a process that can stretch from one year to 18 months
The Insurance Authority plans to introduce a licensing fast track for online-only insurance companies, accelerating an approval process which currently takes about 12 to 18 months, according to Insurance Authority chief executive John Leung Chi-yan.
About a dozen companies have filed license applications to set up in Hong Kong as traditional insurers using agents to liaise with customers, Leung said Tuesday at a regulatory conference in Hong Kong.
The fast track will apply to online-only insurers providing direct sales of basic life insurance, travel or personal accident coverage. He stressed that the accelerated process will not apply to more complex insurance products requiring consultation with agents.
“For the more complicated life insurance products, which would require policyholders to contribute money for 20 or 30 years, it would not be appropriate for these to be sold online,” he said. “Qualified salesperson should clearly explain the products to customers.”
The fast track represents the latest effort by the Insurance Authority to promote insurtech, or the practise of insurance companies using technology to lower operation costs, improve responsiveness and provide more personal and reliable insurance services to customers.
“Generally it would need 12 to 18 months for a traditional insurance applicant to get a license. The fast track will be a separate queue for us to handle the application, so the process would be much faster,” Leung said.
“We believe there are advantages in encouraging more insurance companies to sell products online or via other digital channels. These types of digital sales would usually be cheaper as customers do not need to pay commissions for salespersons,” Leung said.
Leung also said the Insurance Authority would introduce a regulatory “sandbox” to allow insurance companies to conduct pilot trials on new products.
The Insurance Authority, which began operating in June, has regulatory responsibility for local insurance companies and about 100,000 salesmen.
The authority has 170 staff and plans to expand to 300 in about two years.
“We are working on the capital requirement and an insurance protection fund to enhance the protection of the insurance policy holders in Hong Kong,” Leung said.