What is updated in 2022 in IIQE Paper 1 Insurance Exam Study Manual? Is the 2017 or older version sufficient for the upcoming exams?

March 18, 2022

The 2021 version of IIQE Paper 1 was officially applicable to exams in 2022

Insurance Authority has taken over the supervision of the insurance industry for more than two years. The IIQE Paper 1 (Insurance Intermediary Qualification Examination) finally put the new regulatory structure in the study manual, and the new study manual can be downloaded on the website of VTC PEAK as usual for free. The new exam coverage will be applied on exams starting from March 31, 2022. By that time, the old material study manual will be replaced. If students, unfortunately, used the old version, they may suffer a little, because this update does not just change one or two words, but the entire chapter and some more changes throughout the manual!

What has been changed in the new version of IIQE Paper 1 Insurance Principles and Practice Materials Study Manual?

More than two years after the Insurance Authority took over the supervision of the insurance industry, the IIQE Paper 1 (Insurance Intermediary Qualification Examination) has finally put the new regulatory framework into the study manual, and the new study manual is available for free download on the website of VTC PEAK. The new examination coverage will be of service on March 31, 2022! At that time, the old material study manual will be replaced. If students, unfortunately, used the old version, they may suffer a little, because this update does not only change only a word or two but the entire chapter and some more updates throughout the entire book!

Part of theactioncontent
1.1.2aChangeAn alternative Chinese term for the term pure risk added
1.1.3(c)(iii)ChangeSome difficult paragraphs are changed to more human-understandable language, such as the definition of risk avoidance and risk transfer
2.1. 4AddThe privity of contract, detailing the impact of this common law principle on the third party of a contract
4.12AddThe Key Persons in Control Functions part
5.1.1DeleteDelete the phrase which specifies that the classification of insurance followed the format used in the U.K. and the European Community
5.2.1-5.2.4ChangeThe data of the number of insurers
5.2.3ChangePublication frequency of the Manpower Survey Report on the Insurance Industry from once every 2 years to once every 4 years
5.4(a)ChangeMention the fact that the Insurance Authority has taken over the supervision of the industry since September 2019
5.5.1(a)DeleteDelete the sentences which said the industry was self-regulatory with the aid of HKFI
5.5.1(c)ChangeEmphasize that the previous functions of the Insurance Agents Registration Board are a thing of the past, and to reiterate that the IA is now the regulatory body
5.5.2ChangeApproved Bodies of Insurance Brokers are renamed as the Professional Bodies of Insurance Brokers and delete the descriptions that these brokerage bodies are responsible for giving authorisation to intermediaries
5.5.2AddReiterate that CIB and PIBA no longer give authorisation to intermediariesReinstate that CIB and PIBA are still playing an important role in improving the regime of the insurance industry and providing training to members
5.5.3(a)ChangeThe Insurance Claims Complaints Bureau (ICCB) >> The Insurance Complaints Bureau (ICB)
6.1.1RemoveRemoval of the word “will” in the sentences the IA “will” take over
6.1.1eAddThe abbreviation of the ‘Guideline on Reinsurance with Related Companies’ >> “GL12”
6.1.1f(c)(ii)AddThe abbreviation of  ‘Guideline on Actuarial Review of Insurance Liabilities in respect of Employees’ Compensation and MotorInsurance Businesses’ >> “GL9”
6.1.2d (a)DeleteDelete the function that HKFI registers insurance agent
6.1.2eChangeThe insurer should comply with the Code of Practice for the Administration of Insurance Agents and participate in the Insurance Claims Complaints Bureau ICCB >> should become a member of the Insurance Complaints Bureau (ICB)
6.1.3 (2017 Version)DeleteDelete HKFI’s “Guidelines on Complaints Handling” section
6.1.3 (2017 Version 6.1.4)Change + AddThe Insurance Claims Complaints Bureau (ICCB) was replaced by The Insurance Complaints Bureau (ICB); added non-claim related insurance disputes resolution services; added the fact that insurers engaged in personal insurance business must become members, the structures of the ICBThe new claim amount/monetary value is also different (new cap: HK$1 million)
.The Insurance Complaints Bureau has launched a new mediation service to deal with insurance claims that are not related to disputes over claims but involve money.
6.1.3b (j)&(k)addedNon-claims mediation scope: not related to the insurer’s service level or underwriting decision and not related to policy performance but technical errors or defaults
6.1.3cAddAdded a short paragraph on the handling of unresolved mediation services not related to claims
6.2AddAdded regulatory changes from September 2019
6.2.1Change+AddRegulation of Hong Kong insurance intermediaries regroups entire section

Old 6.2.1
•Delete the “Guidelines on Complaints Handling”
•Deletion of the definitions of Appointed Insurance Agent and Authorized Insurance Broker
•The part describing a proprietor, partner and director of two insurance agents at the same time moved to 6.2.3
•Agents can represent at most 4 principals moved to 6.2.5


New 6.2.1
•Explain that the new licensing regime does not differentiate between employees and non-employees,
•Explain the definition of regulated activity,
•Define material decisions and regulated advice,
•Exemption from applying for a licence,
•Define 5 types of licensees under the new regime
•Definition of Licensed Insurance Agent, Licensed Insurance Agency and Licensed Insurance Broker Company, Regulated Person
6.2.2ChangeOld 6.2.2
•Removed some old guidelines
•c (f) Delete the liability of the insurance company to its insurance agent
 ◘Appointment by written agency contract
 ◘Placing name tags at the service desk or counter
•Delete the Code of Practice for the Administration of Insurance Agents, the relevant parts of the Insurance Agents Registration Board, the register-related, complaints, disciplinary actions, the Appeals Tribunal

•Fit and proper person part moved
•Removed age requirements
•Deleted “avoid affecting prospective policyholders while filling out the application form”, “state that prospective policyholders are responsible for what they put down on the application form”, and “explain the consequences of fraud, concealment, and misrepresentation”

•Removed Guidelines on Misconduct (‘IARB – GN4’), Guidelines on Handling of Premiums (‘IARB – GN5’), and Guidelines on the Effective Date of Registration of Insurance Agents, Responsible Officers and Technical Representatives (‘IARB – GN6’)

•Continuing Professional Development (CPD) Programme
(‘IARB – GN7’) moved to a later part
 •Guidelines Moved to 6.2.5 with a name change
•Remove the Guidance Note Applicable to Registered Persons Wishing to Engage/Continue to Engage in Investment-linked Long Term (ILLT) Insurance Business on or after 1 March 2010 (‘IARB –
GN11’)


New 6.2.2
•Rewrite of the entire section on the relationship between the authorised insurer and its agent
•Explain what would happen if the common law was used to interpret the agent acted for whom at the critical moment
•The principal and the agent have an Vicarious Liability
•The joint liability principals share if an agent represents more than one principal

•Delete the Appeals Tribunal part
6.2.3AddedOld 6.2.3 
•Minimum Requirements Specified for Insurance Brokers partially moved to 6.2.5(f)(i )8.1(g)(i) Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules
 ◘ Keeping Proper Books and Accounts part has minor revisions
 ◘ Fit and Proper 6.2.3f >>   6.2.4(c)
 ◘ Character & Reputation 6.2.3f( i) > 6.2.4(c.)
 ◘ Integrity 6.2.3f(i) > 7.1(e)
 ◘ Impartiality 6.2.3f(i) > 7.1.1(c.)
 ◘ Cannot mislead 6.2.3f(i) > 6.2. 5(f)(ii)1.1
 ◘ Self-proclaimed as a licensee 6.2.3f(i) > out syll
 ◘ Avoiding conflicts of interest 6.2.3f(i) > 6.2.5(f)(ii) 7.1
 ◘ Can not induce surrender 6.2.3f(i) > out syll
 ◘ Prudence and diligence 6.2.3f(ii) > 6.2.5(f)(ii) 3.1
 ◘ Prioritise the interests of clients 6.2.3f(ii) > 6.2.5(f)(ii) 2.1
 ◘ Should source from a sufficient range of different insurers, and a sufficient range of insurance products 6.2.3f(ii) > 6.2.5(f)(ii) 2.2
 ◘ Protecting the privacy and confidentiality of customers )(ii)3.4
 ◘ The number is shown on the business card 6.2.3f(ii) > 6.2.5(f)(ii)   5.1(d)
 ◘ Ability 6.2.3f(ii) > 6.2.4(c.)
 ◘ Has not been convicted of any criminal offence which would render him unfit to act as an insurance broker 6.2.3f(ii) > 6.2.4(c.)(iii)
 ◘ Annual Financial Statements and Auditor’s Report 6.2.3e >> 6.2.5(g)( v)&(vi)


New 6.2.3
•Roles that cannot be played at the same time
•Added “Multiple Capacities of Licensed Insurance Intermediaries”
6.2.4Added(previously there were only 3 parts in Chapter 6)Licensing-related brief descriptions, such as licensing conditions (Including academic qualifications, reputation, character, etc.)

New 6.2.4
•Licensing conditions 6.2.4(a.)
•Definition of controllers 6.2.4(a.)
•Licensing conditions for five types of licensees 6.2.4(a. )(i)-(v)
•Minimum Number of Responsible Officers and their licensing conditions 6.2.4(b.) & (c.)
•Fit and Proper Criteria, including any disciplinary action by SFC or MPFA or other authorities/regulators , ongoing or future businesses of the responsible officers’ 6.2.4(c.)
•Fit and proper criteria for individual licensees, including academic qualifications, IIQE passing results, representative/agent/principal’s exemption from academic qualifications (specified person), exemption from IIQE, definition of integrity, reliability, etc.
•Criteria for Business Entities, appointing more than one responsible person in certain circumstances
•Delete age requirement
6.2.5Change(previously only 3 parts in Chapter 6)Other regulatory measures

New 6.2.5
•New regulatory measures: The IA may make rules, These guidelines and guidelines are not subsidiary legislation; failure to comply with any of them does not in itself constitute judicial or other legal process. 6.2.5
•Rule 3 – Maximum number of authorised insurers & rules 4 and 5 are used to calculate the number 6.2.5(a.)
•Insurer has power to appoint or instruct an inspector and investigator in writing 6.2.5(b)
•Past and present Responsible officers are all responsible 6.2.5(c.)(i)
•The IA has the power to revoke or suspend licences, private and public reprimand, imposition of fines
•Code of Conduct for Licensed Insurance Agents (“Agents’ Code”) (8 General Principles)
 ◘ Premiums should not be paid in cash 6.2.5(f)(i)8.1(c)
•Code of Conduct for Licensed Insurance Brokers (“Brokers’ Code”) (8 General Principles) No. 6.2.5(f)(ii)5.1(d)
 ◘ Avoidance of conflicts of interest 6.2.5(f)(ii)7.1

•Insurance (Financial and Other Requirements for Licensed
Insurance Broker Companies) Rules (the ‘Rules’) 6.2 .5(g) (Required Share Capital and Net Assets 6.2.5(g)(i),
•Professional Indemnity Insurance 6.2.5(g)(ii),
•Segregated Client Accounts, 6.2.5(g)(iii)
•Safekeeping Books and Accounts (written in Chinese/English, 7 years), 6.2.5(g)(iv)
•Audited Financial Statements, 6.2.5(g)(v)&(vi)
•Auditor’s Report, 6.2.5 (g)(vi)
•Guideline on Continuing Professional Development for Licensed
Insurance Intermediaries (GL24) (10 hours >> 15 hours, 8 types of eligible continuing professional training activities, must include 3 hours of Ethics or Regulations) 6.2.5(h )
6.模擬試題ChangeMock Questions #2-4
7.1.1(b)&7.1.2(b)Change>>With reference to the Insurance Ordinance
7.2.1(e)ChangePart VIA >> Part 6A
7.4.6aChangeThe effective date of the writing guidelines is 2012 in the 2017 version, and the effective date is changed to the IA takeover day in  the 2021 version
7.5ChangeAdded 3 small parts regarding “Prevention of Bribery Ordinance”: Major Provisions of the POBO, Report Corruption, and Assistance from the ICAC

I mistakenly review The 2017 or older version! Can I cope with the exam?

Although the 2017 version (including data update) has partially updated the information of the Insurance Authority, many places have been deleted, and some regulatory changes have not been included, such as the removal of age restrictions and the addition of academic qualifications. The old version also did not include the Code of Conduct for Licensed Insurance Agents (‘Agents’ Code’) and the Code of Conduct for Licensed Insurance Brokers (‘Brokers’ Code’), which were important references under the new regulatory framework. So taking the new exam with the 2017 version would be a disadvantage, unless you can recite the whole book fluently then you still have a chance of passing on the unaltered range. If you unfortunately studied the older version and do not have enough time to look at the 2021 new version, it is strongly recommended that students must at least read chapter 6 of the 2021 new version. If time permits, it is best to find some revision materials on the Internet to strengthen memory and understanding.

WHY ME?!

If students misread the version older than the 2017 version, since the regulatory structure is completely different, which stays in the old regime before September 23, 2019, there is a high chance of losing points in regulatory-related issues. If time permits, it is recommended that students study the new version.

Is there any way to master this lengthy exam scope faster?

The new version of the manual is almost 30 pages longer than the 2017 version! The total number is 212 pages. There are also about 160 pages of text without counting the table of contents and appendices. There are no pictures at all. Is there any way to make it more interesting, faster, easier to remember and easier to understand?

Students can try 2CExam’s mock exams and free Youtube course videos (only available in Chinese). The company’s mock exam questions have been updated according to the latest 2021 version!

We recommend that you read a chapter of the study manual or Youtube video first, and then do the mock questions as if you did their homework when you were a student. If you make a mistake, go back to the book to find out why you made a mistake. This study method can help students effectively and efficiently learn concepts.

How can we help you?

2CExam provides HKSI LE, IIQE, EAQE and SQE related exam preparation materials. We sell mock question banks for IIQE Papers 1, 2, 3, 5 and MPFE in Chinese and English; and bibles for IIQE Papers 1, 2, 3, MPFE in Chinese. We also offer 1 on 1 tutorial services. Besides, we have also made free tutorial videos for IIQE Papers 1, 2, 3 and MPFE and posted on public channels such as Youtube/ Bilibili/ Tencent/ Iqiyi. 2CExam has been an exam training expert for years. Should you need any help please visit www.2cexam.com.hk or contact us through:

Phone +852 2110 9644 Email: [email protected] Wechat: hk2cexam WhatsApp: +852 9347 2064

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