MACAU SAR, CHINA Trends and Developments Contributed by: Carlos Eduardo Coelho and Shanley Lei, MdME
tracts and planning for disruptions, helping Macau’s insurers to stay competitive as technology transforms the industry. These regulations are not meant to hold back pro- gress; instead, they are designed to support the growth of the industry, but within a system that builds trust and keeps insurance professionals accountable. Referral Models in Insurance: Regulatory Requirements and Best Practices Referral arrangements, where third parties introduce clients (particularly from Mainland China) to insur- ers or intermediaries, have become a growing trend of Macau’s insurance market. This growth reflects a broader trend in the region, as insurers look for new ways to offer their products to a broader array of customers and diversify their distribution channels. Partnerships with referrers, such as financial advisers and other third parties, create new opportunities for business expansion and client acquisition. However, these arrangements also bring new chal- lenges. Risks such as provision of unlicensed servic- es, unauthorised sales and potential misconduct have led regulators to take action. In September 2025, the Hong Kong Insurance Authority (IA) issued a circular setting out its regulatory expectations regarding refer- ral fees paid by licensed insurance broker companies in respect of participating policies and implementing referral fees caps. This measure aims to limit exces- sive payments to referrers, which can distort incen- tives and increase mis-selling risks. As a result, some market participants expect that a segment of such referral business may progressively shift from Hong Kong to Macau, where the regulatory environment still allows a certain level of flexibility in structuring referral arrangements. In Macau, the AMCM promptly addressed market reactions by issuing the Guidelines on Regulatory Requirements for Life Insurance Referral Business, effective 20 November 2025. The guidelines aim to protect consumers and uphold market integrity by ensuring that referral activities are conducted in a transparent and ethical manner. As of the end of November 2025, no cap had been imposed on referral fees in Macau.
For insurance businesses in Macau, this trend brings both opportunities and added responsibilities. On one hand, Macau could see more referral activity, especial- ly from intermediaries and referrers looking to boost their earnings. Insurers here may benefit from more referrals of clients based in Mainland China. On the other hand, insurers must be cautious in managing the associated risks. The AMCM’s guidelines require clear boundaries between marketing and regulated advice, robust due diligence on referrers, and careful moni- toring of sales practices. There is also a requirement to notify and submit relevant documentation to the AMCM for approval, including the envisaged referral business model, before commencing any client refer- ral business. In any case, insurers must also ensure that referral partnerships are properly documented, regularly reviewed, and structured to prevent conflicts of interest or regulatory loopholes. The guidelines also emphasise the importance of post-sale confirmation. Insurers are expected to ensure that clients have clear information about prod- uct features, risks and rights. These measures help to strengthen transparency, prevent mis-selling, and build trust between insurers and policyholders. Proposed Implementation of Risk-Based Capital Regime The Macau government has initiated research on implementing a risk-based capital (RBC) framework for the insurance industry, with full implementation expected by 2027. This initiative aims to strengthen solvency supervision and bring Macau’s regulatory standards in line with international best practices. The RBC framework will introduce structured capital requirements based on the risk profiles of different insurance operations, with the objectives of: • enhancing governance and risk management prac- tices; • improving the overall stability of the financial sys- tem; and • increasing resilience and protection for policyhold- ers. This move reflects global regulatory trends and under- scores Macau’s commitment to building a sound and
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