IIQE Paper 6 flashcards
IIQE Paper 6 · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Insurance Authority
- Hong Kong's statutory regulator of insurers and insurance intermediaries, established under the Insurance Ordinance (Cap. 41) and fully operational from 23 June 2017.
- Insurance Ordinance Cap. 41
- The principal legislation establishing the Insurance Authority, setting out its statutory functions, licensing regime, supervisory powers, and disciplinary sanctions for insurers and intermediaries.
- Premium levy
- A levy charged on insurance premiums to fund the Insurance Authority's operations, replacing the previous arrangement under which the Office of the Commissioner of Insurance was funded.
- Responsible Officer
- An individual approved by the Insurance Authority to supervise the regulated activities of a licensed insurance broker company or agency, and who must be a director (or sole proprietor/partner).
- Fit and proper criteria
- The standards the Insurance Authority applies when licensing intermediaries, covering financial soundness, qualifications, experience, competence, integrity, reputation, and compliance record.
- CPD requirement
- Licensees must complete 15 continuing professional development hours per year, including at least 3 hours on ethics and 3 hours on the relevant business type, with records kept.
- Licence renewal
- A licence is valid for three years; renewal must be applied for before expiry, and the licensee must cease regulated activity if the licence lapses.
- Licensed insurance broker
- A company licensed by the Insurance Authority to act as agent of the client, placing business with one or more insurers and owing a duty to the client.
- Licensed insurance agency
- A company licensed by the Insurance Authority to act as agent of one or more insurers, selling and advising on the insurer's products under an agency agreement.
- GL16 conduct requirements
- The Insurance Authority's guideline setting standards for licensed insurance intermediaries on honesty, suitability, disclosure, conflicts of interest, remuneration, and record keeping.
- Suitability obligation
- Before recommending a product, the intermediary must conduct a financial needs analysis and risk profiling and ensure the recommendation fits the client's circumstances.
- Disclosure of capacity
- The intermediary must tell the client whether they act as agent of the insurer or as broker of the client, because this affects the duty owed.
- Client money account
- A separate bank account maintained by a licensed insurance broker to hold premiums and other client money, kept distinct from the broker's own funds.
- Record retention period
- Conduct records, including financial needs analysis and advice, must generally be kept for at least seven years and produced to the Insurance Authority on request.
- Financial needs analysis
- A documented assessment of the client's objectives, time horizon, income, assets, liabilities, risk tolerance, and existing coverage, conducted before any product recommendation.
- Risk profiling
- The process of assessing the client's willingness and ability to bear risk, which must be documented and matched to the recommended product's risk level.
- Product disclosure
- The intermediary's explanation of a product's key features, benefits, exclusions, charges, and risks, including the non-guaranteed nature of certain benefits.
- Cooling-off period
- A period after the sale of specified life insurance products during which the client may cancel the policy and obtain a refund, subject to any market value adjustment.
- Benefit illustration
- A document showing projected policy values under different assumed scenarios, used to explain non-guaranteed benefits and charges to the client.
- AML/CFT Ordinance Cap. 615
- Hong Kong legislation imposing customer due diligence, record-keeping, and suspicious transaction reporting obligations on financial institutions, including licensed insurance intermediaries.
- Risk-based approach
- The principle that AML/CFT measures, including customer due diligence and monitoring, should be proportionate to the assessed money laundering and terrorist financing risks.
- Customer due diligence
- Measures to identify the customer and beneficial owner, verify identity using reliable sources, and understand the purpose and intended nature of the business relationship.
- Enhanced due diligence
- Additional CDD measures applied in higher-risk situations, such as politically exposed persons, higher-risk jurisdictions, and complex ownership structures.
- Politically exposed person
- An individual who holds or has held a prominent public position, including family members and close associates, who requires enhanced due diligence.
- Suspicious transaction report
- A report made to the Joint Financial Intelligence Unit when an intermediary knows or suspects that property is connected to a predicate offence.
- Tipping-off offence
- A criminal offence committed when an intermediary discloses to a customer or third party that a suspicious transaction report has been made or is being considered.
- Insurance Complaints Bureau
- An independent, industry-funded body that handles complaints by individual policyholders against licensed insurers and intermediaries, subject to monetary and time limits.
- Pecuniary penalty
- A financial sanction the Insurance Authority may impose on a licensee, up to HK$10 million or three times the profit gained or loss avoided, whichever is higher.
- Insurance Appeals Tribunal
- An independent body that hears appeals against licensing and disciplinary decisions of the Insurance Authority, with further appeal to the Court of Appeal on a point of law.
- Disciplinary sanctions
- Measures available to the Insurance Authority, including private or public reprimand, suspension or revocation of licence, and a pecuniary penalty.
- Confidentiality duty
- The obligation to keep client information confidential and use it only for the purpose obtained, subject to legal disclosure requirements such as AML reporting.
- Conflicts of interest
- Situations where the intermediary's own interest may conflict with the client's; these must be avoided, or disclosed and managed, with the client's interest paramount.