IIQE Paper 6 common mistakes
IIQE Paper 6 · Understand the traps and how to avoid them.
Treating the Insurance Authority as if it still shared day-to-day intermediary supervision with the three self-regulatory organisations, and answering that a broker's licence is issued or renewed by the Hong Kong Federation of Insurance Brokers.
Study notes and older colleagues still describe the pre-2019 regime, so candidates memorise the SRO names and map them onto current questions about who licenses, supervises and disciplines intermediaries.
What to do instead
Anchor on the post-transition position: the Insurance Authority is the sole statutory regulator for insurance intermediaries, issuing licences to licensed insurance brokers and licensed insurance agencies and their responsible officers, and the former SROs became statutory bodies with no licensing role. When a question names an SRO, check whether it is asking about the historical position or the current one before choosing.
Confusing the licensing tracks, for example saying an individual can hold a 'licensed insurance agency' licence, or that a responsible officer must be a licensed insurance broker rather than an individual approved to supervise a licensed agency or brokerage.
The terminology overlaps: 'broker', 'agency', 'technical representative' and 'responsible officer' are all used casually in the workplace, and candidates learn the labels without fixing who the licensee actually is.
What to do instead
Build a two-column table: licensee type (individual versus company) against role (licensed insurance broker, licensed insurance agency, technical representative, responsible officer). Note that a licensed insurance agency or broker is a company, individuals within it are technical representatives, and a responsible officer is an individual approved to supervise the regulated activities of that licensee.
Answering fit-and-proper questions by listing only qualifications and examination passes, and ignoring the other limbs such as financial soundness, criminal or disciplinary history, bankruptcy, and the reliability and integrity of the applicant.
Candidates equate 'fit and proper' with 'has passed the papers', because that is the part of the application they personally control, so they under-select when a scenario turns on a spent conviction or an unresolved bankruptcy.
What to do instead
Memorise fit and proper as a multi-limb test covering education and experience, integrity and reputation, financial soundness, and competence including continuing professional development. In scenario questions, run through each limb explicitly and treat any fact about dishonesty, debt or regulatory action as a trigger to discuss suitability rather than to ignore.
Describing the sales process as a single disclosure step, so answers omit the financial needs analysis, the risk profile, the comparison of alternatives, and the reason-for-recommendation that ties the advice to the client's circumstances.
Candidates revise the product features in depth but skim the process chapter, and under exam pressure they collapse a multi-stage duty into 'explain the product and get a signature'.
What to do instead
Learn the sequence as a checklist: gather client information, conduct the financial needs analysis, assess risk tolerance, identify and compare suitable products, present the recommendation with its rationale, disclose remuneration and conflicts, then document. Practise writing the reason-for-recommendation for a short scenario so the link between client facts and product choice becomes automatic.
Treating remuneration disclosure as satisfied by mentioning that commission is paid, without addressing conflicts of interest, the basis of the remuneration, or how the firm manages the conflict so that advice remains in the client's interest.
Commission is the visible part of the payment structure, so candidates stop there; conflict of interest is perceived as an abstract ethics topic rather than a concrete disclosure obligation.
What to do instead
For every remuneration question, answer in three layers: what the intermediary is paid and by whom, how that could bias the recommendation, and what control operates (disclosure of the basis and amount, a documented comparison of alternatives, or a product-agnostic needs analysis done before product selection).
Assuming record keeping only requires retaining the signed application form, and answering that other documents may be discarded once the policy is issued.
Candidates associate records with the contractual paperwork, not with the evidence trail that proves suitability was assessed, so they miss the analysis, the risk profile and the advice rationale.
What to do instead
Treat the client file as the proof of the whole sales process: client information and needs analysis, risk profiling, product comparison, the recommendation and its reasons, disclosures made, and the signed documents, all retained for the required period and available to the regulator on request. In questions, ask 'what would an inspector need to see to reconstruct this sale?'
Applying customer due diligence as a fixed form-filling ritual, for example saying identification is always required in identical depth and that simplified measures are never permitted, instead of scaling measures to the assessed money laundering and terrorist financing risk.
The risk-based approach is a principle, while the CDD steps are a list, and candidates memorise the list because it is easier to recall under time pressure.
What to do instead
Frame CDD as a risk-driven decision: identify and verify the customer and beneficial owner, understand the purpose and intended nature of the relationship, and apply enhanced measures for higher-risk situations such as politically exposed persons or complex ownership, with simplified measures only where the assessed risk is genuinely low and the decision is documented.
Treating suspicious transaction reporting as something done after internal discussion and confirmation of wrongdoing, so answers say the intermediary should investigate first or wait until the client admits the source of funds.
Candidates import ordinary customer-service instincts, where you clarify before escalating, into an area where tipping off is an offence and the obligation is to report suspicion promptly.
What to do instead
Memorise the sequence: recognise the red flag, report internally to the designated officer promptly, do not tip off the customer, do not continue the transaction where the suspicion stands, and let the joint financial intelligence unit decide whether to investigate. Suspicion, not proof, is the trigger.
Confusing the Insurance Complaints Bureau with the Insurance Authority, for example saying the Bureau can impose disciplinary sanctions or that the Insurance Authority must adjudicate every complaint before the Bureau can act.
Both bodies handle complaints, and the names suggest a hierarchy, so candidates assign the disciplinary toolkit to whichever body they read about most recently.
What to do instead
Separate them by function: the Insurance Complaints Bureau resolves disputes between customers and insurers through a mediation and adjudication process within its terms of reference, while the Insurance Authority investigates and disciplines licensed intermediaries through warnings, conditions, suspension or revocation, and other sanctions. Complaints handling by the licensee itself is a separate conduct obligation.
Answering enforcement and appeal questions as if a disciplinary decision is final, omitting the right to appeal to the Insurance Appeals Tribunal, and omitting that the Insurance Authority must investigate before sanctioning rather than acting on rumour.
Candidates focus on the list of sanctions and stop reading once they reach the penalty menu, so the procedural safeguards and the appeal route are never learned.
What to do instead
Learn enforcement as a process with stages: complaint or supervisory finding, investigation with the licensee given an opportunity to respond, a decision by the Insurance Authority, a right of appeal to the Insurance Appeals Tribunal, and a sanction proportionate to the misconduct. Attach the appeal route to every sanction you memorise.
Treating continuing professional development as a box to tick at renewal, or answering ethics scenarios by choosing whichever option maximises the sale while staying technically within the rules.
Candidates separate ethics from conduct and revise CPD as an administrative formality, so they miss questions that test honesty, fair dealing and confidentiality as substantive duties that override commercial pressure.
What to do instead
Study CPD as an ongoing competence obligation with a defined annual requirement, recorded and relevant to the regulated activities performed. For ethics items, eliminate options that breach confidentiality, misrepresent the product, or put the intermediary's interest first, then choose the option that a regulator would regard as fair dealing even where it costs the sale.