It was reported in February that, driven by the falling yuan, Chinese people have been flocking to Hong Kong to buy insurance products.
As a result, CIRC has highlighted the legal, regulatory, and insurance product differences between the regions that could leave mainland customers open to greater risks.
If policies are surrendered within the first two years, policyholders would not get anything back, the CIRC said, adding that the compensation limit of Hong Kong’s Insurance Claims Complaints Bureau (ICCB) is only HK$1m (£89,500, $128,900, €144,800).
Fees for resolving disputes were also said to be higher in Hong Kong.
Defend insurers
“The CIRC warning shows the mainland regulator wants to defend mainland insurers which lost business to Hong Kong insurance companies when there are an increasing number of mainlanders now buying insurance products in Hong Kong,” Christopher Cheung Wah-fung, lawmaker for the financial services sector in the city, told South China Morning Post.
He added, however, that he wished the regulator wouldn’t intervene in the free-market, instead it should let customers choose.
Purchases of life policy premiums sold in Hong Kong to mainland visitors in Hong Kong totalled HK$31.6bn, or 24.2% of all life premiums, at the end 2015, up from just 6% in 2009.
