‘Treating Customers Fairly’ and the exercise of discretion

June 2024

The Hong Kong Insurance Authority has published a new Guideline in connection with the Establishment and Maintenance of Fund(s) in Respect of Participating Business. Building on the existing requirements to Treat Customers Fairly, the new Guideline will require insurance companies to review their existing policies and practices to ensure compliance.

Given the new Guideline, it is timely to revisit the exercise of discretion regarding the operation of participating funds, especially the declaration of bonuses. It transpires that the new Guideline has strong similarities with requirements in other jurisdictions, which might help with its interpretation. Read more about these and the implications for insurance companies.