The Hong Kong Insurance Authority (IA) is tightening regulation on the city's booming premium financing market, as this once niche lending arrangement has spread to lower-tier insurance purchasers. The IA is also reviewing related regulations, particularly how insurance companies assess customer affordability. Marty Lui, Executive Director at the IA, stated on Friday that some insurers have actively promoted premium financing to the middle class by lowering thresholds and using high leverage, without adequately ensuring buyers understand the potential risks. He believes this product is absolutely unsuitable for the general public. The IA also found that over the past year, some policyholders borrowed low-interest Swiss francs to purchase USD-denominated policies, exposing borrowers to significant exchange rate losses if the Swiss franc appreciates. Furthermore, disputes with offshore banks are difficult to resolve under Hong Kong's legal jurisdiction. Alan Wu, Acting Head of Market Conduct at the IA, revealed at the same briefing that joint inspections with the Hong Kong Monetary Authority (HKMA) uncovered three violations, including some insurers neglecting existing liabilities (such as mortgage loans) when assessing customer assets, and intermediaries providing financing advice without authorization. The IA expects inspections to be completed by the end of 2026 and will discuss appropriate regulatory measures with the HKMA. Data shows that premium financing accounted for 36% of Hong Kong's new premium value in the first half of this year, up from 12% in 2024 and 19% in 2025.