A cross-sector background check scheme will expand to cover all life insurance agents in banks and insurers in July to root out “rolling bad apples,” Hong Kong de facto central bank said.
Through the mechanism under the Cross-sector Reference Checking Arrangement, banks and insurance institutions can share conduct-related information of prospective employees covering the past seven years to collectively stop "bad apples" from rolling into a different sector within the financial industry, said Arthur Yuen Kwok-hang, deputy chief executive of the Hong Kong Monetary Authority.
The arrangement, being put forward by both the HKMA and the Insurance Authority, is expected to cover 110,000 employees in both sectors.
It draws on the experience of a similar mandatory background check scheme in the banking industry launched in 2023. The first phase of the scheme covered approximately 3,500 senior staff of banks, while the second one included 50,000 staff members, including those who are licensed or registered to carry out securities, insurance, or Mandatory Provident Fund regulated activities.
Yuen said around 2,800 reference checks have been conducted under the scheme as of last year, of which only 29, or about 1 percent of the total, involved negative information.
The figure is small but very meaningful, demonstrating that potential “bad apples” can be identified under the scheme, he said.
The HKMA, the IA, and the industry will maintain close cooperation on the matter and will continue to explore the feasibility of extending the arrangement to other financial sectors with other regulatory bodies, thereby fostering the long-term, robust growth and development of Hong Kong's financial industry, Yuen added.
𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓
