Effective January 2026
2026 HK Savings Insurance
New Regulations Explained
Commission deferral 70%/30%, illustration rate cap 6%/6.5%, GL34 governance
7 policy changes explained
Illustration Rate Cap
6%/6.5%
Jul 2025
First Year Commission
70%
Jan 2026
Referral Fee Cap
50%
Oct 2025
GL34
Effective
Mar 2026
PolicyTimeline
| Effective Date | Policy Content | Scope | Status |
|---|---|---|---|
| July 1, 2025 | Illustration rate cap (HKD 6%, non-HKD 6.5%) | All participating savings | Effective |
| October 1, 2025 | Referral fee cap 50% | Licensed brokers | Effective |
| January 1, 2026 | Commission deferral (first year ≤70%, 30% over 5 years) | Regular premium participating | Effective |
| January 1, 2026 | Product naming rules (must include "insurance") | New savings products | Effective |
| March 31, 2026 | GL34 dividend governance effective | Participating business | Pending |
| June 30, 2026 | GL34 Section 4 company policy effective | Participating business | Pending |
| January 1, 2027 | Naming rules extended to existing products | All savings products | Pending |
Illustration RateCap Explained
Effective July 1, 2025, standardizing sales illustrations
Key Points
- • HKD policies: Expected IRR cap ≤ 6%
- • Non-HKD policies: Expected IRR cap ≤ 6.5%
- • Only affects sales illustration documents
- • Does not affect actual dividend payouts
- • Insurers can still pay dividends above the cap
Why Set a Cap?
- • Some companies attracted customers with inflated return expectations
- • Insufficient disclosure of non-guaranteed return volatility
- • Potential violation of "Treating Customers Fairly" principles
- • Avoid severe gap between expectations and reality
✓ Impact on Policyholders
More conservative illustrations ≠ lower actual returns. This just makes sales presentations more realistic. Investment capabilities and dividend policies remain unchanged.
July 2025Rush Recap
"Last Train" effect before new regulations
Market Phenomena
- • Investors rushed to buy before July 1
- • Insurance service centers crowded with customers
- • Some brokers raised thresholds, prioritizing HNW clients
- • 0.5% illustration rate difference amplified by market
Product Adjustments
- • AIA "CS" series discontinued
- • Some "Premium Savings" products discontinued
- • FWD, AIA adjusted dividend illustrations
- • Post-July products focus on features and service upgrades
⚠ Rational Reminder
The illustration rate cap only affects sales illustrations, not actual dividend payouts. "Last train" mentality may lead to irrational decisions. Focus on dividend fulfillment history, not illustration document numbers.
CommissionDeferral System
Effective January 1, 2026, reshaping intermediary incentives
Commission deferral illustration
Deferral Rules
- • First year cap: ≤ 70% of total commission
- • Subsequent: At least 30% spread over Years 2-6
- • Scope: Regular premium participating products
- • For payment periods <5 years, spread over actual period
Commission Calculation Example
| Assumption | Before Reform | After Reform (2026+) |
|---|---|---|
| Annual Premium | HKD 100,000 | HKD 100,000 |
| Total Commission (80%) | HKD 80,000 | HKD 80,000 |
| Year 1 Commission | HKD 72,000 (90%) | HKD 56,000 (70%) |
| Years 2-6 Annual | HKD 1,600 | HKD 4,800 (6%/year) |
| Total Commission | HKD 80,000 | HKD 80,000 (unchanged) |
5 Exemption Categories
| Exemption Type | Description |
|---|---|
| Non-financial performance bonus | Performance rewards linked to service quality |
| Fixed salary employees | Insurance employees receiving fixed salaries |
| Bancassurance agents | Bank insurance agencies |
| Professional investors | Professional investors with assets >HKD 8M |
| Single premium/Annuity | Single premium products and QDAP |
ProductNaming Rules
New products from Jan 2026, all products from Jan 2027
Before
- • XX Plan
- • XX Savings
- • XX Wealth
- • XX Legacy
After
- ✓ XX Insurance Plan
- ✓ XX Savings Insurance
- ✓ XX Wealth Insurance
- ✓ XX Legacy Insurance
Regulatory Purpose
- • Consumers can more easily identify insurance products
- • Avoid confusion with other financial products
- • ILAS and QDAP are exempted
Referral FeeCap Explained
Effective October 1, 2025, regulating payments to unlicensed referrers
≤50%
Total Commission Cap
✓
Compliant: Normal Commission
Licensed agents receiving commissions per regulations
Regulatory Purpose
- • Curb unlicensed referrers using high rebates to induce purchases
- • Over 50% requires detailed disclosure and explanation
- • Subject to closer IA scrutiny
GL34 DividendGovernance
Effective March 31, 2026, enhancing participating business governance
GL34 Governance Structure
Core Requirements
- • EstablishParticipating Business Committee (PBC)
- • Provide independent, objective advice to the Board
- • StrengthenAppointed Actuary responsibilities
- • Enhance fairness and transparency of participating business
Effective Dates
- • March 31, 2026: Main guidelines effective
- • June 30, 2026: Section 4 company policies effective
| Responsible Party | Core Duties | Significance for Policyholders |
|---|---|---|
| Board of Directors | Ensure fair treatment of customers | Highest accountability level |
| Participating Business Committee | Provide independent objective advice | Independent oversight mechanism |
| Appointed Actuary | Prudent assessment of dividend allocation | Professional technical assurance |
Impact onPolicyholders
✓ Benefits
- • More conservative illustrations, expectations closer to reality
- • Agents have stronger incentives forlong-term service
- • Reduced "sell and disappear" situations
- • Orphan policy issues expected to improve
- • Rebate space compressed, more compliant purchases
- • GL34 enhances dividend transparency and fairness
⚠ Cautions
- • Some agents may leave during transition
- • Need to assess agent long-term service capability
- • Lower illustration rate ≠ lower actual returns
- • Still need to check dividend fulfillment rates
| Dimension | Before Reform | After Reform |
|---|---|---|
| Sales Illustrations | Possibly optimistic | Closer to reality |
| Agent Service | Possibly one-time transaction | Renewal commission incentives |
| Orphan Policies | More common | Expected to decrease |
| Rebate Risk | Prevalent | Space compressed |
| Dividend Transparency | Average | GL34 enhanced |
Impact onAgents
Short-term Challenges
- ❌ First year income drops ~20-30%
- ❌ Increased cash flow pressure
- ❌ Industry reshuffle, some practitioners exit
- ❌ Rebate space compressed
Long-term Opportunities
- ✓ Total commission unchanged, just deferred
- ✓ More stable, predictable income
- ✓ Professional service providers stand out
- ✓ Longer client relationships
💡 Transition Tips
- 1. Adjust financial expectations, plan cash flow
- 2. Strengthen professional capabilities, improve service quality
- 3. Shift from transactional to relationship-based approach
- 4. Focus on existing client renewals and referrals
Impact onInsurance Companies
Product Design Adjustments
- • Illustration rates must comply with caps
- • Product naming must be adjusted
- • Benefit illustration documents modified
Systems and Process Changes
- • Commission system overhaul
- • Deferred payment mechanism
- • Dividend committee establishment
Competitive Landscape Changes
- • Competition shifts from rates to service
- • Dividend fulfillment more important
- • Brand reputation more critical
Impact onMarket
| Dimension | Short-term (1-2 years) | Medium-Long term (3-5 years) |
|---|---|---|
| Practitioners | Accelerated industry reshuffle | Professionalization, stabilization |
| Rebates | Significant reduction | Structurally compressed |
| Unlicensed Sales | Severely cracked down | Significantly reduced |
| Service Quality | Transition period | Overall improvement |
| Industry Image | Short-term pain | Gradual improvement |
| Market Concentration | May increase | Leading companies gain advantages |
2025Market Data
Mainland customers drive HK insurance market to record highs
2025 H1 New Premium
HKD 173.7B
+50.5% YoY
2025 Q1 New Premium
HKD 93.4B
All-time high
Mainland Customer Share
30-40%
Exceeds pre-COVID
2024 Mainland Premium
HKD 62.8B
+6.5% YoY
| Driving Factor | Manifestation | Impact Level |
|---|---|---|
| Interest Spread Appeal | Mainland deposits 1.5%-2.2% vs HK savings 6%-7% | ⭐⭐⭐⭐⭐ |
| Wealth Anxiety | Shift from "health anxiety" to "wealth anxiety" | ⭐⭐⭐⭐⭐ |
| "Last Train" Effect | Rush buying before July rate cap | ⭐⭐⭐⭐ |
| Cross-border Travel Recovery | HK-Mainland border fully reopened | ⭐⭐⭐⭐ |
| Fed Rate Cuts | Sept 2025 down to 4.0%-4.25%, locking yields becomes scarce | ⭐⭐⭐⭐ |
| Multi-currency Allocation | USD policies hedge RMB depreciation risk | ⭐⭐⭐⭐ |
📈 2026 Market Outlook
- • Industry enteringhigh-quality, rational development new phase
- • Competition shifts from "price war" to "value war"
- • Consumers focus more on long-term investment strength and dividend fulfillment
- • Product innovation focuses on multi-currency, flexible withdrawals, transparency
IntermediaryReference Check Scheme
Phase 2 effective January 2026, targeting "rolling bad apples"
Key Points
- • Phase 1: September 2024 for individual insurance agents
- • Phase 2: January 1, 2026 extends to all licensed individual intermediaries
- • Recruiting companies must checkpast 7 years of employment records
- • Written consent required from agent, refusal means no appointment
Check Focus Areas
- • Whether terminated for serious misconduct
- • Violations of laws or regulations (Insurance Ordinance, AML, etc.)
- • Misrepresentation, misappropriation of client funds, document forgery
- • Unauthorized rebates, commission fraud
- • Criminal offenses, regulatory sanctions, bankruptcy
✓ Significance for Policyholders
The reference check scheme reduces the possibility of problematic agents "job-hopping to escape", improving overall industry integrity. Policyholders can more confidently choose agents who have passed proper background checks.
HKRBCRisk-Based Capital
Effective July 2024, full operation 2026, enhancing insurer financial soundness
Pillar 1: Quantitative Requirements
Capital requirements linked to risk profile, using market-consistent valuation of assets and liabilities
Pillar 2: Qualitative Requirements
Corporate governance and risk management requirements, including ORSA
Pillar 3: Disclosure Requirements
Reporting to IA and public disclosure of solvency information, enhancing transparency
💡 Significance for Policyholders
- • Insurance companies more financially sound, solvency institutionally guaranteed
- • More transparent disclosure, better assessment of company strength
- • Aligned with international standards, enhancing HK insurance market credibility
2026Popular ProductsReference
Key features of savings policies from major insurers (for reference only, please refer to policy terms)
| Product | Company | Features | Suitable For |
|---|---|---|---|
| Evergreen Fortune Series | AIA | Stable fulfillment (95.8%), global asset allocation | Long-term stability, value company strength |
| Infinity Fortune 3 | AIA | Higher expected returns, currency switch from Year 2 | Flexibility and higher returns |
| Flexi Multi-Currency | Prudential | 12 currency options, split-switch function | Multi-currency needs, wealth transfer |
| Genesis Legend | Manulife | 6-year breakeven, 10-year IRR 4.29% | Fast breakeven and short-term returns |
| Fortune Multi | YF Life | Stable investment, 12 annuity conversions | Clear retirement planning needs |
⚠ Selection Tips
- • Above information for reference only, refer to policy terms
- • Focus on dividend fulfillment history, not just expected IRR
- • Choose based on your needs (breakeven time, currency, legacy)
- • Consult licensed professionals before purchasing
TimingAnalysis
Before July 2025
- • Illustration rates may appear higher (visually)
- • Actual dividends are not affected
- • Should not rush to buy just for this
After New Rules
- ✓ Illustrations more realistic
- ✓ Stronger agent service incentives
- ✓ More regulated and compliant market
- ✓ More transparent dividend governance
💡 Rational Decision Framework
- 1. Insurance decisions should be based on actual needs, not policy timing
- 2. Focus on dividend fulfillment rates, not illustration rates
- 3. Evaluate agent long-term service capability
- 4. Choose reputable insurance companies
ProductSelection Guide
| Evaluation Criteria | Importance | How to Evaluate |
|---|---|---|
| Dividend Fulfillment Rate | ⭐⭐⭐⭐⭐ | Check historical data on company website |
| Company Financial Strength | ⭐⭐⭐⭐⭐ | Check solvency ratio, ratings |
| Product Features | ⭐⭐⭐⭐ | Compare coverage, flexibility |
| Illustrated IRR | ⭐⭐⭐ | Reference only, don't over-rely |
| Premium Level | ⭐⭐⭐ | Compare with similar products |
| Agent Service Capability | ⭐⭐⭐⭐ | Evaluate professionalism and long-term service commitment |
✓ Should Focus On
- • Dividend fulfillment history
- • Company solvency
- • Long-term service commitment
⚠ For Reference Only
- • Illustrated IRR
- • Advertised returns
- • Short-term promotions
❌ Should Not Trust
- • Rebate promises
- • Unrealistic return guarantees
- • Pressure to sign
Major InsurersDividend FulfillmentReference
2025 disclosed data (reflecting 2024 performance), Source: IA, 10Life
| Insurer | Products | Avg Total Cash Value Ratio | Range | Assessment |
|---|---|---|---|---|
| AIA | 75 products | 95.8% | 91%-111% | Low variance, stable |
| Manulife | 37 products | 96.8% | 69%-102% | 97% products >90% |
| Prudential | 69 products | 91.8% | 68%-160% | Higher variance |
95.8%
AIA Avg Fulfillment
Evergreen Fortune series stable
96.8%
Manulife Avg Fulfillment
Low variance, steady
91.8%
Prudential Avg Fulfillment
Higher variance, check specific products
📊 What Fulfillment Rate Means
- • Near 100%: Actual payout close to illustrated
- • Above 100%: Actual payout exceeds illustrated
- • Below 100%: Actual payout below illustrated
- • Insurers must disclose prior year data by June 30 annually
- • Check on insurer websites or platforms like 10Life
AgentSelection Guide
| Criteria | How to Evaluate | Red Flags |
|---|---|---|
| License Status | Check on IA website | Cannot provide license number |
| Experience | Ask about tenure | Less than 1 year |
| Expertise | Ask product details | Vague or unclear answers |
| Service Commitment | Ask about renewal service | Only discusses first year |
| Rebate Attitude | Whether proactively mentioned | Proactively offers rebates |
| Company Background | Research company reputation | Poor company reputation |
✓ How to Verify Agent Credentials
- 1. Visit IA website ia.org.hk
- 2. Go to "Register of Licensed Persons"
- 3. Enter agent name or license number
- 4. Verify license status and affiliated company
CommonMyths Debunked
❌ Insurance will get more expensive
✓ Truth: New rules don't affect pricing, only illustrations and commissions
❌ Actual returns will decrease
✓ Truth: Illustration caps don't affect actual dividend payouts
❌ Should rush to buy before new rules
✓ Truth: Products themselves unchanged, no need to rush
❌ Agent income will decrease
✓ Truth: Total commission unchanged, just deferred payment
❌ No one will want to provide service
✓ Truth: Quite the opposite, renewal commissions incentivize long-term service
❌ All insurance affected
✓ Truth: Mainly regular premium par policies, single premium and annuities unaffected
FAQ (25 Questions)
Policy Understanding
What new rules take effect in 2026?▼
Mainly: Commission deferral (first year ≤70%), product naming rules (must include "insurance"), GL34 dividend governance (March).
What does the illustration rate cap mean?▼
Projected IRR shown at sale cannot exceed 6% for HKD or 6.5% for non-HKD. Only affects sales illustrations, not actual dividends.
How exactly is commission deferred?▼
First year ≤70%, remaining 30%+ spread over years 2-6. Total commission unchanged.
Which products are affected?▼
Mainly regular premium par policies. Single premium products, QDAP, ILAS are unaffected.
What is GL34?▼
IA's Guideline on Governance and Management of Participating Fund Business, requiring insurers to establish par business committees for fairness and transparency.
Purchase Decisions
Should I rush to buy before new rules?▼
Not recommended. New rules don't change product essence, just make illustrations more realistic. Decisions should be based on needs, not timing pressure.
Will agent service worsen after new rules?▼
Quite the opposite. Deferred commission incentivizes ongoing service, or agents risk losing renewal commissions.
Buy now or wait for new rules?▼
Depends on your needs. Don't rush due to policy timing. Policy terms and actual dividends are key.
Any changes for Mainland buyers?▼
New rules apply equally to policies bought by Mainland clients. Be more careful with compliance operations.
Can I still get rebates?▼
Rebates are illegal in HK. Risk is higher after stricter regulations. Firmly refuse any form of rebates.
Product Comparison
Where to check fulfillment rates?▼
Insurer websites disclose historical rates, updated by June 30. Also available on 10Life and similar platforms.
Is illustrated IRR still useful?▼
Has some reference value but shouldn't be over-relied upon. Fulfillment rates and long-term performance matter more.
How to choose different currency policies?▼
Based on asset allocation needs. USD cap is 6.5%, HKD 6%, but actual returns depend on investment performance.
How will products change after new rules?▼
Illustration rates must comply with caps, naming must include "insurance", but product essence and coverage unchanged.
Will premiums change?▼
New rules don't directly affect premium pricing, which mainly depends on product design and actuarial assumptions.
Which company's products are better?▼
No absolute best. Key factors: fulfillment rates, financial strength, whether features meet your needs.
Agent Related
Will agent income really decrease?▼
First year income drops ~20-30%, but total commission unchanged, just deferred. Long-term income becomes more stable.
Will agents quit?▼
Some who can't adapt may leave during transition, but professional advisors will have better opportunities.
How to verify agent credentials?▼
Check the Register of Licensed Persons on IA website (ia.org.hk).
What if an agent promises rebates?▼
Rebates are illegal. Firmly refuse and report to IA.
Are existing policies affected?▼
New rules apply to new policies only. Existing policies unaffected.
Are bank channels better?▼
Bank insurance channels have conditional exemptions from deferral rules, but selection criteria should still focus on products and services.
Summary
2026 bringscomprehensive regulatory upgrades to HK savings insurance: illustration rate caps, commission deferral, enhanced dividend governance, and product naming standards.
For policyholders, this isstrongly beneficial: more realistic illustrations, stronger service incentives, and a more regulated market. Core values—long-term compound growth, multi-currency allocation, wealth transfer—remain unaffected.
Quick Reference
- 1. Jul 2025: Illustration rate cap (HKD 6%, non-HKD 6.5%)
- 2. Oct 2025: Referral fee cap 50%
- 3. Jan 2026: Commission deferral (First year ≤70%) + Naming rules
- 4. Mar 2026: GL34 dividend governance effective
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Sources: HK Insurance Authority, GL34 Guidelines, 10Life, Ming Pao
Last updated: January 2026
Disclaimer: This report is for reference only. Please consult licensed professionals before purchasing.