Insurance Rebates: Compliance vs. Boundary-Pushing, Complete Guide I. Background and Limitations of Rebates In Hong Kong, regarding long-term insurance products (e.g., life insurance, savings with dividends, investment-linked insurance), the Insurance Authority (IA) has clear guidelines (e.g., GL25 – Guideline on Offering of Gifts) prohibiting unrecorded or under-the-table “money-giving” rebates. II. Common “Compliant Practices”: Transparent Approaches…

Insurance brokerage firms can legally give “rebates” to clients as long as they follow the law and regulatory requirements. The most important thing is to ensure the process is transparent, documented, and not done secretly. Here are three main approaches: 1. Using the Client’s Close Friends or Family as “Referrers” 2. Formally Documenting “Rebate” Terms…

In the insurance industry, especially in markets like Hong Kong and the U.S., two practices often spark debate: rebating and the involvement of unlicensed third parties. Rebating happens when brokers or agents offer customers a portion of the premium or commission as an incentive to buy insurance. Meanwhile, unlicensed third parties are people without proper…

In Hong Kong’s fiercely competitive financial services landscape, insurance brokers face the constant challenge of differentiating themselves and delivering greater value to their clients. One innovative strategy gaining traction is rebranding as multiple family offices (MFOs). By transforming from traditional insurance providers into comprehensive wealth management hubs for high-net-worth (HNW) and ultra-high-net-worth (UHNW) families, brokers…

Hong Kong is an international financial hub with a mature legal and financial system, and its insurance market is transparent and well-developed. According to the Insurance Ordinance (Cap. 41 of Hong Kong Laws), anyone or any company conducting insurance broker business in Hong Kong must apply for and obtain an insurance broker licence from the…

1. Private Securities Funds (Private Equity / Securities-Focused Fund) OverviewA private fund set up in an offshore jurisdiction (e.g. Cayman, BVI) invests mainly in Hong Kong or overseas listed securities. It requires an investment manager (management team) in Hong Kong to make investment decisions. 2. Multi-Family Office / External Asset Management (EAM) OverviewProvides discretionary asset…

Below is a simpler British English version of the “Twenty Common Scenarios (Revised Edition)” text. It explains how a broker with a Type 1 licence (regulated by Hong Kong’s Securities and Futures Commission, or SFC) may or may not hold client assets and the implications for various business activities. We distinguish: Scenario 1: Purely Introducing…

1. What Is a “Type 1 Licence”? The “Type 1 Licence” (Dealing in Securities) is issued by Hong Kong’s Securities and Futures Commission (SFC). It regulates those who carry out securities dealing activities (i.e. a “regulated activity”). The following activities fall under Type 1: If you also want to act as a “sponsor” (helping a…

Q1: Why has the concept of a ‘Multi-Family Office’ emerged? In the early days of wealth management, ‘Investment Advisor’ or ‘External Asset Manager (EAM)’ were common terms. As demand grew from ultra-high-net-worth individuals, some firms rebranded the traditional ‘managing assets for clients’ model into the concept of a ‘Family Office’ to emphasise an image of…

1. What is an “MFO”? 2. Multi-Family Offices and Insurance Business are “Inextricably Linked” 2.1 Doubling as Insurance Brokers, Dual Roles Many self-proclaimed “MFOs” actually also hold insurance broker or agent qualifications. Why? The problem is that double charging naturally creates conflicts of interest: 2.2 Not Just Insurance: Other Common Conflicts Beyond insurance, some MFOs…