Introduction
The Insurance Authority (IA) announced the revised "GL16: Underwriting Guidelines for Long-term Business (Excluding Category C Business)" on February 6, 2026. This revision further aligns the guideline with the Insurance Core Principles, Standards, Guidance and Assessment Methodology issued by the International Association of Insurance Supervisors (IAIS), improves consistency and overall readability and removes duplicate content from the last update to GL34. The revised GL16 will come into effect on March 31, 2026, while the relevant requirements related to Part 4 of GL34 will be extended to June 30, 2026.
As the revision of GL16 officially comes into effect, major insurance companies have successively updated their financial needs analysis (FNA) in response to the heightened regulatory requirements for product suitability. The industry has generally adjusted the structure, risk disclosure methods and presentation of non-guaranteed elements of FNA, and YFG has also simultaneously launched a new version of FNA (YFBL FNA v3.2) to ensure that its processes are consistent with the latest regulatory expectations. This article explains the main revisions to GL16 and the key changes in the new version of FNA to help licensed business representatives understand how the regulatory direction affects day-to-day practice.
Regulatory Framework
1. International Association of Insurance Supervisors. (2024). Insurance Core Principles, Standards, Guidance and Assessment Methodology (ICP). IAIS.
2. Insurance Authority (IA) (2024)."Guideline on Underwriting Long Term Insurance Business (other than Class C Business)(GL16). Insurance Authority (IA).
YFG Compliance Department's View：GL16: Main Changes in This Revision
What is IAIS?
IAIS (International Association of Insurance Supervisors) is the "International Association of Insurance Supervisors". It is a global organization of insurance regulators, composed of local insurance regulatory authorities, responsible for formulating international insurance regulatory standards, including the Insurance Core Principles (ICP). In short, it is the global rule-setter for the insurance industry. The Hong Kong Insurance Authority is a formal member of the IAIS and needs to participate in international regulatory discussions and standard setting. Therefore, the Insurance Authority needs to localize ICP standards and implement them in Hong Kong's Regulatory Framework. The revision of GL16 is one example of this process.
Changes to the GL16 suitability assessment requirements
The new version of GL16 clearly narrows "knowledge and experience" to "financial knowledge and experience", which means that when conducting financial needs analysis, insurance companies must understand the customer's financial-related knowledge level and can no longer use general life or purchasing experience as the basis for judgment. This requires business representatives to more accurately grasp customers' understanding of investments, risks and non-guaranteed elements, and ensure that recommended products are consistent with their financial understanding.
At the same time, the new version of GL16 adds "risk tolerance" as information that must be collected, extending the risk assessment that was mainly used for investment products in the past to all long-term insurance products.
In order to comply with this requirement, financial needs analyses used by insurers across the market (including YFBL FNA v3.2) have added risk questionnaires and risk classification mechanisms, and require the risk profile of a product to align with the customer's risk tolerance.
Conclusion
This update of GL16 and the launch of the new version of FNA are regulatory requirements that must be fulfilled by all insurance companies, including YFG. However, this also reflects the high regulatory standards of Hong Kong's insurance market and the IA’s emphasis on protecting policyholders. The rigorous Regulatory Framework not only enhances the transparency and professionalism of the industry, but also further enhances overseas customers' confidence in the Hong Kong insurance market.
Attachment 1: GL16: Guideline on Underwriting Long Term Insurance Business (other than Class C Business) and GL34: Guideline on Governance and Management of Fund(s) of Participating Business.
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YFG Compliance Department
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