Code of Ethics
"Life Underwriter" shall mean a person who is a member of the Life Underwriters Association of Hong Kong.
"Life Insurance" shall mean all individual life policies, policy riders and annuity contracts and group insurance policies issued by a life insurance company, whether or not such policies contain provisions for cash surrender or paid up values, and any contract under which the reserve, or part thereof, varies in amount depending on the market value of a specified group of assets.
"Group Insurance" shall mean all policies whereby the lives of a number of persons are insured severally under a single contract between an insurer and an employer or other person.
"Client" shall mean a policyholder or prospective policyholder or any other person whom the life underwriter serves in a professional capacity.
1. Priority of Client's Interests
A life underwriter shall place the interests of his clients before his own and shall advise them to the best of his ability without bias and without regard for his own personal advantage.
2. Confidential Information
A life underwriter shall respect the confidentiality of his clients and carefully safeguard any information which becomes known to him regarding their personal and business affairs.
3. Suitability of Insurance
A life underwriter shall ensure as far as possible that any policy recommendations are suitable to the needs and not beyond the resources of his clients.
4. Explanation of the Policy
A life underwriter shall explain all the essential provisions of the policy being recommended and ensure as far as possible that the client understands what he is committing himself to and in particular draw attention to the long term nature of the policy and to the consequent effects of early discontinuance.
A life underwriter shall also ensure that material information passed to him by, or on behalf of, the insured are reforwarded to the insurer before the issuance of a life policy.
A life underwriter shall uphold the institution of life insurance and refrain from making statements of a misleading or defamatory nature which might cause members of the public to lose confidence in any life insurance company, its policies or its agents.
A life underwriter shall not, directly or indirectly, rebate or attempt to rebate all or any part of premium for life insurance.
A life underwriter shall not, where it could be detrimental to the interests of the client, directly or indirectly, induce or attempt to induce a client to lapse, forfeit, or surrender for cash or for paid up or extended insurance, or for other valuable consideration, any existing contract of individual life insurance in order to replace it with another contract for individual life insurance.
9. Transfer of Group Insurance or Retirement Benefit Business
A life underwriter in placing new group insurance or retirement benefit business shall, to the best of his ability, endeavour to protect the interest of the client and the rights of existing participants with regard to any existing arrangements.
10. Fees and Premium
A life underwriter shall not overcharge, or attempt to overcharge, any fees or premium other than those officially laid down by the insurer. All fees or premium collected by a life underwriter from the insured must be forwarded to the insurer without delay.
Recruitment Prohibition Policy Guideline
1. The purpose of all functions organized by the LUAHK is to provide exchange of ideas, experiences and knowledge among members of the Association in an atmosphere that encourages an attitude of caring and sharing.
2. The LUAHK believes that such purpose would be seriously undermined should our functions be used as opportunities for the recruitment of life underwriters.It is a policy of the LUAHK, therefore, to condemn any unethical practice of recruiting among participants during the course of any functions/courses organized by the Association.
3. Membership of the Association and admission to the courses organized by LUAHK may be denied to persons who are found to be violators of this policy or the Law of Hong Kong. No refund will be made under this circumstances.
Best Practice Guidelines
1. Know your client and recommend suitable products
The intermediary should inquire about the clients’ backgrounds, their motives and objectives of purchasing insurance plans, and the stability of their income sources in order to provide appropriate investment recommendations from professional point of view. In addition, the recommendations on insurance products should base on clients’ needs to help them to accomplish their goals in protection and financial planning at different stages of life.
2. Deliver the policy within the cooling off period
It is necessary to hand-in the issued policy to the client within the cooling off period in order to secure customer’s right during cooling off period.
3. Provide clear explanation on policy's details
It is necessary to clearly explain to clients on the scope of coverage of their insurance plans, and to remind them about the important provisions and rules stated in the policy, such as the waiting period, the premium grace period, and the suicide clause etc.
4. Elaborate the potential returns and risks of the product
The intermediary should clearly explain the contents of Investment-Linked Assurance Scheme (ILAS) and investment plan, as well as the values of relevant investments to the clients. The intermediary should never exaggerate the expected rate of return or cover up the risks that may involve, and should let the clients understand the investment return may go up and down and they must make their own insurance decision based on the risk taking abilities.
5. Handle policy replacement prudently and declare the relevant benefit and loss clearly (Handle policy replacement prudently and declare the relevant benefit and loss clearly)
It is necessary to elaborate the pros and cons to the client when he/ she has decided to replace an existing insurance policy. Also the intermediary is required to complete the Customer Protection Declaration Form (“CPDF”) and explain the contents and actual impact on policy replacement to the clients. For example, the insurer may have to reassess the insured’s health condition, and the calculation of waiting period and suicide clause of the new policy will be restarted.
6. Support claims follow ups
Insurance intermediaries have to do their utmost in assisting and explaining to clients about the procedures and documents required for insurance claims in order to help clients to receive payment promptly, signifying the value of insurance services.
7. Handle client's information properly to protect personal privacy
It is necessary to keep clients’ information, contents of insurance policies, claims documents and relevant information in high confidentiality. To safeguard clients’ privacy, it is prohibited to use their information arbitrarily and the intermediaries must handle, store and dispose the documents in a proper manner.
8. Handle clients’ premium properly
There must be a clear differentiation over client’s premium from the intermediary’s own money. If the intermediary received money from the clients as insurance premium, he / she is required to hand over the money to the insurer within the designated period set by the industry regulation, and arbitrary usage of client’s premium is strictly prohibited.
9. Maintain close tie and provide updated information to clients
Clients have different needs over time. Thus intermediary has to maintain close tie with clients and provide updated information in order to provide professional insurance and financial recommendations to clients.
10. Knowledgeable and comply with applicable industry guidelines and regulations
Insurance intermediaries have to understand, implement and comply with the industry guidelines and regulations issued by regulators, insurers and LUAHK. In the meantime, they have to keep abreast of the updates and modifications of industry regulations. In case of any doubts, they should take the initiative to seek clarifications from the related regulator or the compliance department of the affiliated insurers.