The Hong Kong Monetary Authority (HKMA) has announced on 8 July 2022 that authorized institutions (AIs) in Hong Kong are required to audio record the selling process of protection linked plans (PLPs) with retail banking customers. A new circular is issued to provide flexibility for AIs to adopt an alternative arrangement for audio recording when selling PLPs to non-vulnerable customers (non-VCs). Under this alternative arrangement, AIs can choose to follow the post-sale controls used for investment-linked assurance scheme (ILAS) products regulated by the Insurance Authority (IA). These post-sale controls should be conducted by a non-sales staff member who has no conflict of interest with the sale, and the requirements specified in the IA’s guidelines must be complied with. The circular also emphasizes the importance of adequate disclosure to customers regarding top-up investments in PLPs. AIs must disclose and explain the death benefit amounts, the impact of top-up investments on the death benefit, and applicable fees and charges.
Resource:
https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2023/20230830e1.pdf
