Effective January 1, 2026

HK Insurance Commission Reform
Complete Guide

First-year commission capped at 70%, remaining 30% paid over 5 years.How does this "HK version of premium-commission alignment" affect consumers and agents?

First Year

≤70%

Cap Limit

Remaining

30%

Over 5 Years

Products

Par Plans

Regular Premium

Purpose

Long-term

Reduce Issues

ReformBackground

For a long time, Hong Kong insurance market has faced issues caused byhigh first-year commissions: mis-selling, illegal rebates, orphan policies, and unlicensed sales.

This reform by the IA aims to address these issues systematically, linking insurance intermediary income tolong-term service quality, promoting healthy industry development.

❌

Mis-selling

High commissions lead to exaggerated returns and hidden risks

❌

Illegal Rebates

Some agents return commissions to customers

❌

Orphan Policies

Agents leave after earning high commissions

❌

Unlicensed Sales

Referral arbitrage leads to regulatory violations

Core RulesExplained

Item	Regulation	Notes
Effective Date	January 1, 2026	Applies to policies issued on or after
Scope	Regular premium participating policies	Excludes single premium and QDAP
First-Year Cap	70% of total commission	Upfront commission cannot exceed
Remaining Commission	30% spread over Years 2-6	Equal annual payments
Record Keeping	At least 7 years	To prove compliance

💡 Simple Explanation

If total commission is HKD 1 million, before reform agents could get HKD 900K+ in year one. After reform, maximum HKD 700K in year one, with remaining HKD 300K paid HKD 60K annually over 5 years. This incentivizes ongoing client service.

Commission StructureChanges

Comparison	Before	After
First-Year Commission	Up to 90%+	≤70%
Renewal Commission	Decreasing, minimal later	30% spread over 5 years
Incentive Direction	Short-term sales	Long-term service
Agent Retention	High turnover	More stable
Client Service	May be lacking	Guaranteed

CommissionCalculation Examples

Understand the impact on agent income through specific cases

Case: 5-year payment participating plan (Total commission HKD 1M)

Year	Before Reform	After Reform	Change
Year 1	HKD 950K	HKD 700K	-HKD 250K (↓26.3%)
Year 2	HKD 20K	HKD 75K	+HKD 55K (↑275%)
Year 3	HKD 15K	HKD 75K	+HKD 60K (↑400%)
Year 4	HKD 10K	HKD 75K	+HKD 65K (↑650%)
Year 5	HKD 5K	HKD 75K	+HKD 70K (↑1400%)
Total	HKD 1M	HKD 1M	No change

Before: Front-loaded

• 95% commission in Year 1
• Only 5% in Years 2-5
• Incentivizes short-term sales
• Leads to orphan policies

After: Balanced

• 70% commission in Year 1
• 7.5% each year for Years 2-5
• Incentivizes ongoing service
• More stable income

Comparison by Payment Period

Payment Period	First-Year Change	Spread Period	Annual Renewal
5 Years	950K → 700K (↓26.3%)	4 Years	HKD 75K/year
10 Years	900K → 700K (↓22.2%)	5 Years	HKD 60K/year
25 Years	850K → 700K (↓17.6%)	5 Years	HKD 60K/year

* Based on HKD 1M total commission, actual ratios vary by product

💡 Key Insights

• Total unchanged — Only the payment schedule changes
• Short-term income drops — First year reduced by 20-30%
• Long-term income stable — Renewal commissions guaranteed
• Service-driven — Must continue service to receive remaining commission

Impact onConsumers

✅ Benefits

✓ Reduced rebate space — Better policy compliance
✓ Less mis-selling — Agents won't exaggerate returns for high commissions
✓ Fewer orphan policies — Agents motivated to continue service
✓ Better service quality — Agent income tied to service
✓ Legal protection — Reduced regulatory violation risks

⚪ Neutral Impact

• Product prices largely unaffected
• Coverage remains unchanged
• Claims process unchanged
• Dividend mechanism unchanged

💡 Advice for Consumers

• Choose licensed agents or brokers
• Avoid rebate offers - may void your policy
• Focus on agent's expertise and long-term service commitment
• Stay in contact with your agent after purchase

Impact onInsurance Agents/Brokers

Aspect	Impact	Assessment
First-Year Income	Reduced by 20-30%	Short-term Challenge
Ongoing Income	Stable income in Years 2-6	Long-term Benefit
Industry Shakeup	Short-sighted leave, professionals benefit	Polarization
Service Focus	From "sales push" to "service"	Positive Incentive
Total Income	Unchanged long-term, just spread out	Neutral

⚠ Short-term Challenges

• First-year cash flow drops
• "Quick money" model ends
• Some practitioners may exit
• Need to adjust personal finances

✅ Long-term Opportunities

• Stable renewal income
• Professional service providers valued
• Stronger client loyalty
• Industry image improves

Impact onInsurance Companies

✅ Benefits

• Smoother commission payments
• Reduced cash flow pressure
• Better agent retention
• Higher customer satisfaction

⚠ Challenges

• Need to adjust contracts and processes
• Incentive mechanisms need redesign
• System upgrades required

🔄 Transformation

• From "volume push" to "reputation building"
• Product design focuses on long-term value
• Service systems become more comprehensive

ExemptionDetails

Not all situations are subject to the 70%+5-year spread limit; the following may be exempted

Exemption	Condition	Notes
Non-financial performance pay	Based on customer satisfaction, policy persistence	Paid to management or upline agents
Service quality bonuses	Includes renewal rate, complaint rate metrics	Bonuses tied to service quality
Salaried employees	Compensation not tied to sales	Fixed salary system
Bancassurance channel	Meets appropriate remuneration structure principles	Co-supervised with HKMA
Professional investor policies	Assets over HKD 8 million	Professional investor status verification required

💡 About Referral Fee Limits

The IA also stipulates that referral fees paid by licensed insurance brokersmust not exceed 50% of total commission, to curb cross-border referral gray chains and cut off unlicensed sales chains.

Comparison with Mainland"Premium-Commission Alignment"

Comparison	HK New Rules	Mainland "Alignment"
Effective Date	January 1, 2026	Gradual implementation from 2023
Core Requirement	First-year commission ≤70%	Filed rate = Actual rate
Scope	Regular premium participating policies	All insurance products
Exemptions	Multiple exemptions	Virtually none
Regulator	Insurance Authority (IA)	CBIRC
Industry Impact	Structural adjustment	Significant fee reduction

HK New Rules Features

HK new rules mainly adjust commission payment timing (first year vs renewals), not drastically cutting total commission. Main purpose is to incentivize long-term service and reduce short-term behavior issues.

Mainland "Alignment" Features

Mainland "premium-commission alignment" requires insurers' filed rates to match actual rates, effectively compressing intermediary costs with greater industry impact.

Referral FeeNew Rules Explained

Effective October 1, 2025, the IA also implemented referral fee limits to combat unlicensed referral issues

Item	Regulation	Notes
Effective Date	October 1, 2025	Earlier than commission rules
Referral Fee Cap	50% of total commission	Paid to referrers
Excess Disclosure	Detailed disclosure required	If exceeding 50%
Purpose	Combat unlicensed sales	Cut referral arbitrage chains

Prohibited Behaviors

❌ Unlicensed persons substantially involved in sales
❌ High referral fees to induce referrals
❌ Referrers filling out application forms
❌ Referrers participating in product recommendations

Compliant Referrals

✓ Only providing customer contact info
✓ Not participating in product recommendations
✓ Referral fee not exceeding 50%
✓ Customer informed and consenting

Insurance CompanyResponse Measures

Major insurers are adjusting commission structures and incentive mechanisms to adapt to new rules

Company	Expected Adjustments	Key Focus
AIA	Adjust participating policy commissions	Strengthen AIA Vitality service system
Prudential	Optimize agent incentive mechanisms	Enhance customer service training
Manulife	Commission installment payment system upgrade	Emphasize long-term service value
AXA	Adjust performance metrics	Introduce service quality KPIs

Commission Structure Adjustment

All companies will cap first-year commission at 70%, with remaining 30% spread over 5 years. Some may adjust total commission levels to attract quality agents.

Service Incentive Enhancement

Introducing more service quality metrics like customer satisfaction, renewal rates, complaint rates, tied to bonuses to incentivize quality service.

Training System Upgrade

Strengthening agent professional training, shifting from sales-oriented to service-oriented, improving customer experience and long-term value creation.

IndustryDevelopment Trends

The new commission rules will drive HK insurance industry from high-speed growth to high-quality development

Short-term (1-2 years)

• Industry shakeup accelerates, some practitioners exit
• Agent income structure adjustment period
• Insurance company system and process upgrades
• Rebate phenomenon significantly reduced
• Market policy adaptation period

Mid-to-Long-term (3-5 years)

• Professional service providers valued
• Overall customer service quality improves
• Orphan policies significantly reduced
• Industry image notably improves
• Market concentration may increase

Trend	Expected Change	Consumer Impact
Practitioners	More professional, stable	Better service quality
Product Design	More long-term value focus	More transparent returns
Channels	More formal channels	Safer purchases
Service Model	From selling to managing	Better experience
Industry Image	Gradual improvement	Higher trust

AgentSurvival Guide

How can insurance agents successfully transform under the new rules?

✅ Transformation Tips

1. Adjust financial expectations — First-year income drops, but more stable long-term
2. Strengthen expertise — Improve product knowledge and service skills
3. Build client relationships — Shift from transactional to relationship-based
4. Focus on renewals and referrals — Existing clients are your best resource
5. Improve service quality — Reputation is the best marketing
6. Embrace digitalization — Use technology to improve efficiency

⚠ Things to Avoid

1. Short-sighted behavior — Don't harm client interests for performance
2. Rebate behavior — Regulatory risk outweighs benefits
3. Neglecting service — Renewal commissions depend on ongoing service
4. Resisting change — Adapting to new rules is key to survival
5. Going solo — Team collaboration offers advantages

💡 Long-termism Mindset

The new rules encourage"long-term thinking": Build long-term client relationships, provide ongoing service, and income will be more stable. Agents who adapt to this shift will achieve greater success in the future.

InsurancePurchase Tips

✅ Do

• Choose licensed agents
• Focus on agent expertise
• Understand service commitments
• Stay in touch after signing
• Review policies regularly

❌ Don't

• Accept rebates
• Buy through unlicensed persons
• Focus only on product, ignore service
• Be tempted by high return promises

💡 Consider

• Agent's years of experience
• Agent's license status
• Insurance company brand strength
• Long-term return stability
• Dividend fulfillment ratio history

CommonMyths Debunked

❌ Insurance prices will rise after new rules

✓ Fact: New rules don't affect product prices, only commission payment timing

❌ Agent total income will decrease

✓ Fact: Total income unchanged, just paid in installments instead of lump sum

❌ All insurance products are affected

✓ Fact: Only applies to regular premium participating policies, lump sum and annuities unaffected

❌ Better to buy before 2026

✓ Fact: Products themselves unchanged, no need to "rush before new rules"

❌ Rebates will completely disappear

✓ Fact: New rules compress space but can't eliminate entirely, key is consumers refusing

❌ Bank insurance purchases unaffected

✓ Fact: Bank channel has conditional exemption but must still meet appropriate remuneration structure principles

RiskWarnings

Rebate Risk

Accepting rebates may void policy legal validity; rebates are considered bribery in HK

Unlicensed Sales

Buying through unlicensed persons makes it hard to protect your rights

Transition Period

Some agents may leave due to income pressure; choosing a stable agent is important

Service Commitment

Assess whether the agent has the ability and willingness to provide long-term service

FAQ (15 Questions)

Policy Related

When do new rules take effect?▼

From January 1, 2026, applicable to all regular premium participating policies issued on or after that date.

Which products are affected?▼

Mainly regular premium participating life policies. Lump sum premium products and qualifying deferred annuities are not affected.

What is the first-year commission limit?▼

First-year commission cannot exceed 70% of total commission; remaining 30% must be spread evenly over years 2-6.

Why is this reform needed?▼

To address issues caused by high first-year commissions: mis-selling, rebates, orphan policies, unlicensed sales, etc.

Are bank channels affected?▼

Bancassurance channels may be exempted if they meet appropriate remuneration structure principles, co-supervised with HKMA.

Consumer Concerns

Will insurance prices rise?▼

No. New rules only adjust commission payment timing, not product prices or coverage.

Should I buy before the new rules?▼

No need. Products themselves remain unchanged, no need to "rush before new rules".

What are the benefits for me?▼

Reduced mis-selling and orphan policies, agents motivated to provide ongoing service, better policy compliance.

Can I still get rebates?▼

New rules compress rebate space. More importantly, rebates are illegal in HK and may affect policy validity. Recommend refusing.

How to choose a reliable agent?▼

Focus on license status, years of experience, expertise, and long-term service commitment. Choose formal channels, refuse rebate temptation.

Industry Related

Will agent income decrease?▼

Total income unchanged, just paid in installments instead of lump sum. Short-term cash flow drops, but long-term income more stable.

Will agents leave?▼

Some who can't adapt may leave, but professional service providers will have better development opportunities.

What do insurance companies think?▼

Short-term process adjustments needed, but long-term benefits: smoother commission payments, better agent retention, higher customer satisfaction.

What is professional investor exemption?▼

Professional investors with assets over HKD 8 million may be exempt from commission spreading requirements for qualifying policies.

Is this HK's "premium-commission alignment"?▼

Similar aspects, but HK rules mainly adjust commission timing, not compress total fees. Impact less severe than Mainland's "alignment".

Summary

The core of the 2026 HK insurance commission reform isshifting from "quick money" to "long-term service". First-year commission capped at 70%, remaining 30% paid over 5 years, incentivizing agents to provide ongoing service.

For consumers, this is amajor positive: compressed rebate space, reduced mis-selling, fewer orphan policies, improved service quality.

Key Points Summary

1. Effective January 1, 2026
2. First-year commission ≤ 70%
3. Remaining 30% paid over 5 years
4. Applies to regular premium participating policies
5. Bancassurance and professional investors may be exempt

Get Professional Advice

Chat with our consultant for personalized insurance recommendations

Chat on WhatsApp

Or scan the QR code above

[email protected]

• Free insurance proposal

• One-on-one consultation

• Assistance with HK visit arrangement

Sources: Hong Kong Insurance Authority, Ming Pao, Securities Times, 10Life

Last Updated: January 2026

Disclaimer: This report is for reference only. Please refer to official IA announcements for specific policies. Consult licensed professionals before purchasing insurance.

Effective January 1, 2026

HK Insurance Commission Reform
Complete Guide

First-year commission capped at 70%, remaining 30% paid over 5 years.How does this "HK version of premium-commission alignment" affect consumers and agents?

First Year

≤70%

Cap Limit

Remaining

30%

Over 5 Years

Products

Par Plans

Regular Premium

Purpose

Long-term

Reduce Issues

ReformBackground

For a long time, Hong Kong insurance market has faced issues caused byhigh first-year commissions: mis-selling, illegal rebates, orphan policies, and unlicensed sales.

This reform by the IA aims to address these issues systematically, linking insurance intermediary income tolong-term service quality, promoting healthy industry development.

❌

Mis-selling

High commissions lead to exaggerated returns and hidden risks

❌

Illegal Rebates

Some agents return commissions to customers

❌

Orphan Policies

Agents leave after earning high commissions

❌

Unlicensed Sales

Referral arbitrage leads to regulatory violations

Core RulesExplained

Item	Regulation	Notes
Effective Date	January 1, 2026	Applies to policies issued on or after
Scope	Regular premium participating policies	Excludes single premium and QDAP
First-Year Cap	70% of total commission	Upfront commission cannot exceed
Remaining Commission	30% spread over Years 2-6	Equal annual payments
Record Keeping	At least 7 years	To prove compliance

💡 Simple Explanation

Commission StructureChanges

Comparison	Before	After
First-Year Commission	Up to 90%+	≤70%
Renewal Commission	Decreasing, minimal later	30% spread over 5 years
Incentive Direction	Short-term sales	Long-term service
Agent Retention	High turnover	More stable
Client Service	May be lacking	Guaranteed

CommissionCalculation Examples

Understand the impact on agent income through specific cases

Case: 5-year payment participating plan (Total commission HKD 1M)

Year	Before Reform	After Reform	Change
Year 1	HKD 950K	HKD 700K	-HKD 250K (↓26.3%)
Year 2	HKD 20K	HKD 75K	+HKD 55K (↑275%)
Year 3	HKD 15K	HKD 75K	+HKD 60K (↑400%)
Year 4	HKD 10K	HKD 75K	+HKD 65K (↑650%)
Year 5	HKD 5K	HKD 75K	+HKD 70K (↑1400%)
Total	HKD 1M	HKD 1M	No change

Before: Front-loaded

• 95% commission in Year 1
• Only 5% in Years 2-5
• Incentivizes short-term sales
• Leads to orphan policies

After: Balanced

• 70% commission in Year 1
• 7.5% each year for Years 2-5
• Incentivizes ongoing service
• More stable income

Comparison by Payment Period

Payment Period	First-Year Change	Spread Period	Annual Renewal
5 Years	950K → 700K (↓26.3%)	4 Years	HKD 75K/year
10 Years	900K → 700K (↓22.2%)	5 Years	HKD 60K/year
25 Years	850K → 700K (↓17.6%)	5 Years	HKD 60K/year

* Based on HKD 1M total commission, actual ratios vary by product

💡 Key Insights

• Total unchanged — Only the payment schedule changes
• Short-term income drops — First year reduced by 20-30%
• Long-term income stable — Renewal commissions guaranteed
• Service-driven — Must continue service to receive remaining commission

Impact onConsumers

✅ Benefits

✓ Reduced rebate space — Better policy compliance
✓ Less mis-selling — Agents won't exaggerate returns for high commissions
✓ Fewer orphan policies — Agents motivated to continue service
✓ Better service quality — Agent income tied to service
✓ Legal protection — Reduced regulatory violation risks

⚪ Neutral Impact

• Product prices largely unaffected
• Coverage remains unchanged
• Claims process unchanged
• Dividend mechanism unchanged

💡 Advice for Consumers

• Choose licensed agents or brokers
• Avoid rebate offers - may void your policy
• Focus on agent's expertise and long-term service commitment
• Stay in contact with your agent after purchase

Impact onInsurance Agents/Brokers

Aspect	Impact	Assessment
First-Year Income	Reduced by 20-30%	Short-term Challenge
Ongoing Income	Stable income in Years 2-6	Long-term Benefit
Industry Shakeup	Short-sighted leave, professionals benefit	Polarization
Service Focus	From "sales push" to "service"	Positive Incentive
Total Income	Unchanged long-term, just spread out	Neutral

⚠ Short-term Challenges

• First-year cash flow drops
• "Quick money" model ends
• Some practitioners may exit
• Need to adjust personal finances

✅ Long-term Opportunities

• Stable renewal income
• Professional service providers valued
• Stronger client loyalty
• Industry image improves

Impact onInsurance Companies

✅ Benefits

• Smoother commission payments
• Reduced cash flow pressure
• Better agent retention
• Higher customer satisfaction

⚠ Challenges

• Need to adjust contracts and processes
• Incentive mechanisms need redesign
• System upgrades required

🔄 Transformation

• From "volume push" to "reputation building"
• Product design focuses on long-term value
• Service systems become more comprehensive

ExemptionDetails

Not all situations are subject to the 70%+5-year spread limit; the following may be exempted

Exemption	Condition	Notes
Non-financial performance pay	Based on customer satisfaction, policy persistence	Paid to management or upline agents
Service quality bonuses	Includes renewal rate, complaint rate metrics	Bonuses tied to service quality
Salaried employees	Compensation not tied to sales	Fixed salary system
Bancassurance channel	Meets appropriate remuneration structure principles	Co-supervised with HKMA
Professional investor policies	Assets over HKD 8 million	Professional investor status verification required

💡 About Referral Fee Limits

The IA also stipulates that referral fees paid by licensed insurance brokersmust not exceed 50% of total commission, to curb cross-border referral gray chains and cut off unlicensed sales chains.

Comparison with Mainland"Premium-Commission Alignment"

Comparison	HK New Rules	Mainland "Alignment"
Effective Date	January 1, 2026	Gradual implementation from 2023
Core Requirement	First-year commission ≤70%	Filed rate = Actual rate
Scope	Regular premium participating policies	All insurance products
Exemptions	Multiple exemptions	Virtually none
Regulator	Insurance Authority (IA)	CBIRC
Industry Impact	Structural adjustment	Significant fee reduction

HK New Rules Features

Mainland "Alignment" Features

Mainland "premium-commission alignment" requires insurers' filed rates to match actual rates, effectively compressing intermediary costs with greater industry impact.

Referral FeeNew Rules Explained

Effective October 1, 2025, the IA also implemented referral fee limits to combat unlicensed referral issues

Item	Regulation	Notes
Effective Date	October 1, 2025	Earlier than commission rules
Referral Fee Cap	50% of total commission	Paid to referrers
Excess Disclosure	Detailed disclosure required	If exceeding 50%
Purpose	Combat unlicensed sales	Cut referral arbitrage chains

Prohibited Behaviors

❌ Unlicensed persons substantially involved in sales
❌ High referral fees to induce referrals
❌ Referrers filling out application forms
❌ Referrers participating in product recommendations

Compliant Referrals

✓ Only providing customer contact info
✓ Not participating in product recommendations
✓ Referral fee not exceeding 50%
✓ Customer informed and consenting

Insurance CompanyResponse Measures

Major insurers are adjusting commission structures and incentive mechanisms to adapt to new rules

Company	Expected Adjustments	Key Focus
AIA	Adjust participating policy commissions	Strengthen AIA Vitality service system
Prudential	Optimize agent incentive mechanisms	Enhance customer service training
Manulife	Commission installment payment system upgrade	Emphasize long-term service value
AXA	Adjust performance metrics	Introduce service quality KPIs

Commission Structure Adjustment

All companies will cap first-year commission at 70%, with remaining 30% spread over 5 years. Some may adjust total commission levels to attract quality agents.

Service Incentive Enhancement

Introducing more service quality metrics like customer satisfaction, renewal rates, complaint rates, tied to bonuses to incentivize quality service.

Training System Upgrade

Strengthening agent professional training, shifting from sales-oriented to service-oriented, improving customer experience and long-term value creation.

IndustryDevelopment Trends

The new commission rules will drive HK insurance industry from high-speed growth to high-quality development

Short-term (1-2 years)

• Industry shakeup accelerates, some practitioners exit
• Agent income structure adjustment period
• Insurance company system and process upgrades
• Rebate phenomenon significantly reduced
• Market policy adaptation period

Mid-to-Long-term (3-5 years)

• Professional service providers valued
• Overall customer service quality improves
• Orphan policies significantly reduced
• Industry image notably improves
• Market concentration may increase

Trend	Expected Change	Consumer Impact
Practitioners	More professional, stable	Better service quality
Product Design	More long-term value focus	More transparent returns
Channels	More formal channels	Safer purchases
Service Model	From selling to managing	Better experience
Industry Image	Gradual improvement	Higher trust

AgentSurvival Guide

How can insurance agents successfully transform under the new rules?

✅ Transformation Tips

1. Adjust financial expectations — First-year income drops, but more stable long-term
2. Strengthen expertise — Improve product knowledge and service skills
3. Build client relationships — Shift from transactional to relationship-based
4. Focus on renewals and referrals — Existing clients are your best resource
5. Improve service quality — Reputation is the best marketing
6. Embrace digitalization — Use technology to improve efficiency

⚠ Things to Avoid

1. Short-sighted behavior — Don't harm client interests for performance
2. Rebate behavior — Regulatory risk outweighs benefits
3. Neglecting service — Renewal commissions depend on ongoing service
4. Resisting change — Adapting to new rules is key to survival
5. Going solo — Team collaboration offers advantages

💡 Long-termism Mindset

InsurancePurchase Tips

✅ Do

• Choose licensed agents
• Focus on agent expertise
• Understand service commitments
• Stay in touch after signing
• Review policies regularly

❌ Don't

• Accept rebates
• Buy through unlicensed persons
• Focus only on product, ignore service
• Be tempted by high return promises

💡 Consider

• Agent's years of experience
• Agent's license status
• Insurance company brand strength
• Long-term return stability
• Dividend fulfillment ratio history

CommonMyths Debunked

❌ Insurance prices will rise after new rules

✓ Fact: New rules don't affect product prices, only commission payment timing

❌ Agent total income will decrease

✓ Fact: Total income unchanged, just paid in installments instead of lump sum

❌ All insurance products are affected

✓ Fact: Only applies to regular premium participating policies, lump sum and annuities unaffected

❌ Better to buy before 2026

✓ Fact: Products themselves unchanged, no need to "rush before new rules"

❌ Rebates will completely disappear

✓ Fact: New rules compress space but can't eliminate entirely, key is consumers refusing

❌ Bank insurance purchases unaffected

✓ Fact: Bank channel has conditional exemption but must still meet appropriate remuneration structure principles

RiskWarnings

Rebate Risk

Accepting rebates may void policy legal validity; rebates are considered bribery in HK

Unlicensed Sales

Buying through unlicensed persons makes it hard to protect your rights

Transition Period

Some agents may leave due to income pressure; choosing a stable agent is important

Service Commitment

Assess whether the agent has the ability and willingness to provide long-term service

FAQ (15 Questions)

Policy Related

When do new rules take effect?▼

From January 1, 2026, applicable to all regular premium participating policies issued on or after that date.

Which products are affected?▼

Mainly regular premium participating life policies. Lump sum premium products and qualifying deferred annuities are not affected.

What is the first-year commission limit?▼

First-year commission cannot exceed 70% of total commission; remaining 30% must be spread evenly over years 2-6.

Why is this reform needed?▼

To address issues caused by high first-year commissions: mis-selling, rebates, orphan policies, unlicensed sales, etc.

Are bank channels affected?▼

Bancassurance channels may be exempted if they meet appropriate remuneration structure principles, co-supervised with HKMA.

Consumer Concerns

Will insurance prices rise?▼

No. New rules only adjust commission payment timing, not product prices or coverage.

Should I buy before the new rules?▼

No need. Products themselves remain unchanged, no need to "rush before new rules".

What are the benefits for me?▼

Reduced mis-selling and orphan policies, agents motivated to provide ongoing service, better policy compliance.

Can I still get rebates?▼

New rules compress rebate space. More importantly, rebates are illegal in HK and may affect policy validity. Recommend refusing.

How to choose a reliable agent?▼

Focus on license status, years of experience, expertise, and long-term service commitment. Choose formal channels, refuse rebate temptation.

Industry Related

Will agent income decrease?▼

Total income unchanged, just paid in installments instead of lump sum. Short-term cash flow drops, but long-term income more stable.

Will agents leave?▼

Some who can't adapt may leave, but professional service providers will have better development opportunities.

What do insurance companies think?▼

Short-term process adjustments needed, but long-term benefits: smoother commission payments, better agent retention, higher customer satisfaction.

What is professional investor exemption?▼

Professional investors with assets over HKD 8 million may be exempt from commission spreading requirements for qualifying policies.

Is this HK's "premium-commission alignment"?▼

Similar aspects, but HK rules mainly adjust commission timing, not compress total fees. Impact less severe than Mainland's "alignment".

Summary

For consumers, this is amajor positive: compressed rebate space, reduced mis-selling, fewer orphan policies, improved service quality.

Key Points Summary

1. Effective January 1, 2026
2. First-year commission ≤ 70%
3. Remaining 30% paid over 5 years
4. Applies to regular premium participating policies
5. Bancassurance and professional investors may be exempt

Get Professional Advice

Chat with our consultant for personalized insurance recommendations

Chat on WhatsApp

Or scan the QR code above

[email protected]

• Free insurance proposal

• One-on-one consultation

• Assistance with HK visit arrangement

Sources: Hong Kong Insurance Authority, Ming Pao, Securities Times, 10Life

Last Updated: January 2026

Disclaimer: This report is for reference only. Please refer to official IA announcements for specific policies. Consult licensed professionals before purchasing insurance.

HK Insurance Commission ReformComplete Guide

ReformBackground

Core RulesExplained

💡 Simple Explanation

Commission StructureChanges

CommissionCalculation Examples

Case: 5-year payment participating plan (Total commission HKD 1M)

Before: Front-loaded

After: Balanced

Comparison by Payment Period

💡 Key Insights

Impact onConsumers

✅ Benefits

⚪ Neutral Impact

💡 Advice for Consumers

Impact onInsurance Agents/Brokers

⚠ Short-term Challenges

✅ Long-term Opportunities

Impact onInsurance Companies

✅ Benefits

⚠ Challenges

🔄 Transformation

ExemptionDetails

💡 About Referral Fee Limits

Comparison with Mainland"Premium-Commission Alignment"

HK New Rules Features

Mainland "Alignment" Features

Referral FeeNew Rules Explained

Prohibited Behaviors

Compliant Referrals

Insurance CompanyResponse Measures

Commission Structure Adjustment

Service Incentive Enhancement

Training System Upgrade

IndustryDevelopment Trends

Short-term (1-2 years)

Mid-to-Long-term (3-5 years)

AgentSurvival Guide

✅ Transformation Tips

⚠ Things to Avoid

💡 Long-termism Mindset

InsurancePurchase Tips

✅ Do

❌ Don't

💡 Consider

CommonMyths Debunked

RiskWarnings

Rebate Risk

Unlicensed Sales

Transition Period

Service Commitment

FAQ (15 Questions)

Policy Related

Consumer Concerns

Industry Related

Summary

Key Points Summary

Get Professional Advice

HK Insurance Commission ReformComplete Guide

ReformBackground

Core RulesExplained

💡 Simple Explanation

Commission StructureChanges

CommissionCalculation Examples

Case: 5-year payment participating plan (Total commission HKD 1M)

Before: Front-loaded

After: Balanced

Comparison by Payment Period

💡 Key Insights

Impact onConsumers

✅ Benefits

⚪ Neutral Impact

💡 Advice for Consumers

Impact onInsurance Agents/Brokers

⚠ Short-term Challenges

✅ Long-term Opportunities

Impact onInsurance Companies

✅ Benefits

⚠ Challenges

🔄 Transformation

HK Insurance Commission Reform
Complete Guide

HK Insurance Commission Reform
Complete Guide