Press Release
LCQ1: Passing rate of Insurance Intermediaries Qualifying Examination
June 27, 2001
Following is a question by the Hon Ambrose Lau and a reply by the Acting Secretary for Financial Services, Ms Au King-chi, in the Legislative Council today (June 27):
Question
To raise the professional status and enhance the local insurance intermediaries' knowledge in insurance, the Insurance Intermediaries Quality Assurance Scheme was launched on 1 January last year. Under the Scheme, all persons engaged in the insurance intermediary business, other than those exempted, are required to pass the Insurance Intermediaries Qualifying Examination, and non-exempted in-service intermediaries have to pass the Examination within a grace period of two years. It has been reported that up to the middle of last month, the passing rate of the Examination stood at about 50%. In this regard, will the Government inform this Council:
(a) of the average passing rate for each paper since the launch of the Examination;
(b) whether it plans to take measures to assist and ensure that all the insurance intermediaries can pass the Examination before the deadline; if so, of the details; if not, the reasons for that; and
(c) whether it will consider extending the grace period so as to allow sufficient time for the insurance intermediaries to pass the Examination?
Reply:
Madam President,
(a) The Insurance Intermediaries Qualifying Examination (IIQE) comprises three parts, a compulsory paper, two optional papers and one independent paper. For the period from the introduction of the IIQE in the second half of 1999 to 8 June 2001, the passing rates and relevant figures in respect of the relevant examination papers were as follows -
Number Number Pasing
of persons of persons Rate
taking the passing the
examination examination
Part I
(Compulsory Paper)
Principles and
Practices of
Insurance 65 973 29 023 44%
Part II
(Optional Paper)
(a) General
Insurance 21 220 8 903 42%
(b) Long Term
Insurance 56 776 30 153 53%
Part III
(Independent Paper)
Mandatory Provident
Fund Schemes 65 365 48 533 74%
Unless otherwise exempted, insurance intermediaries must pass Part I of the IIQE and at lease one paper from Part II, depending on the type of insurance products they would be selling. In addition, insurance intermediaries would need to pass Part III for marketing Mandatory Provident Fund products.
(b) The purpose of introducing the IIQE is to ensure that insurance intermediaries possess the basic qualifications and attain the relevant professional standard. Hard work and perseverance are essential. There is no measure which would ensure all insurance intermediaries could pass the examinations before the deadline.
The Office of the Commissioner of Insurance (OCI) has taken a series of special measures to assist the candidates in preparing for the IIQE. Based on the syllabus of the examinations, it has published study notes for each of the IIQE paper. Examples of examination questions are set out in the study notes as reference for the candidates. The examination questions are set on the basis of the content of the study notes. The OCI has distributed the study notes to all insurance companies free of charge, with a view to facilitating their agents to preparing for the examination. Such notes can also be downloaded from OCI's website. They are available in both English and Chinese to facilitate the candidates to better understand the requirements of the IIQE.
OCI has been in constant contact with the industry and insurance companies to encourage them to provide sufficient training for their agents, with a view to facilitating those who intend to stay in the industry to prepare for the examination. In fact, many insurance companies have already taken positive steps to enhance the training for their agents so that they could obtain the relevant qualification within the grace period.
As the examination authority, the Vocational Training Council also assists in arranging examination sessions for candidates expeditiously. At present, under normal circumstances, candidates can receive their examination results within five working days after taking the examination. Those who fail in the examination can enrol again immediately and can normally re-sit the examination within 3 weeks.
(c) The IIQE is an important element of the Insurance Intermediaries Quality Assurance Scheme ("IIQAS"). The purpose of implementing the IIQAS is to provide better protection to policyholders, by enhancing the professionalism and quality of services of insurance intermediaries. Improving the overall standards of insurance intermediaries could further Hong Kong's status as an insurance centre in the Asian-Pacific region and facilitate the development of our insurance industry. Hence both the OCI and the industry fully recognise that there is a practical need to implement the IIQAS.
Before implementing the IIQAS in 1999, the insurance industry was consulted extensively, through the Steering Committee of the IIQAS. The industry indicated support for the details of the Scheme, including the two-year grace period.
Since the announcement of the IIQAS in May 1999, the Commissioner of Insurance has initiated a series of measures to publicise the IIQAS. These included the publication of publicity materials and making announcements in the OCI's website, through the mass media and at the various activities organised by the industry, to remind insurance intermediaries to take the IIQE as early as possible.
According to the information provided by the self-regulatory bodies, there are approximately 48 000 individual insurance intermediaries. About 13 000 are exempted from the IIQE, representing about 27% of the total number. The remaining 73% (about 35 000) will need to pass the IIQE to continue to practise in the industry. Although we do not have the exact figures, we can derive from the number of intermediaries who have passed both the Principles and Practices of Insurance and the Long Term Insurance papers that at least 29 000 persons have passed the IIQE. We therefore believe that more than 80% of the insurance intermediaries have either been exempted from or passed the IIQE, and can continue to practise in the industry.
The Vocational Training Council now holds an average of 70 examination sessions per week, catering for about 3 000 candidates. On this basis, about 80 000 candidates can attend the IIQE in the coming 26 weeks. The Vocational Training Council is capable of providing more examination venues and arranging for more examination sessions to be held where necessary to cater for the needs of the candidates.
In view of the above arrangements and the feedback from the industry, we believe that the grace period of 2 years is appropriate. With the training provided by the industry, those who want to take the IIQE should have adequate time to do so in the latter half of the year. We do not consider it necessary to extend the grace period.