The Hong Kong Monetary Authority (HKMA) and the Insurance Authority (IA) have announced a cross-sector reference checking arrangement between the banking and insurance industries.
The initiative aims to reduce the risk of financial professionals concealing past misconduct when moving across the broader financial services sector, addressing the “rolling bad apples” phenomenon.
Both sectors already operate independent reference checking frameworks.
The banking sector introduced its Mandatory Reference Checking Scheme in May 2023 for senior roles and expanded it in September 2025, while the insurance sector launched its scheme in September 2024 and broadened its scope in early 2026 to include technical representatives and brokers.
Phase 3A of the cross-sector arrangement will take effect on July 1, 2026.
Insurance entities and Authorised Institutions that are also licensed insurance agencies must perform reference checks when appointing individual insurance intermediaries engaged in long-term insurance business.
They must request and obtain conduct-related reference information covering the preceding seven years using standardised templates under the respective schemes.
The arrangement enables banks and insurers to access relevant conduct records across sectors, supported by mandatory response obligations from former employers.
Banks must generally respond within one month, while insurance entities must typically respond within 15 calendar days.
The HKMA and IA expect regulated institutions to implement appropriate internal controls and procedures to ensure compliance.
Repeated failure to comply may indicate governance weaknesses and could trigger supervisory follow-up.
Both regulators will review the implementation at the end of 2026 and use the findings to guide Phase 3B, which will extend coverage to remaining individuals within the scope of the existing banking and insurance reference checking schemes.
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