Banks will usually request for termination of exclusivity for certain products in certain circumstances, such as when the relevant insurance products cease to become competitive, or the insurer fails to develop the new product within a specific time frame.

Insurers will generally provide training support and a dedicated team to support the sales and marketing of the bancassurance products. Under some bancassurance arrangements, the insurer may also provide insurance personnel to assist the sale and marketing of the products in the bank’s branches, but this will require HKMA approval which is difficult in practice.

The insurer will usually have right to access and use customer data for the purpose of policy administration. The bank will usually remain as the owner of the customer data. The insurer will be required to maintain confidentiality of the data and cannot use it for upselling and cross-selling other insurance products unless with the permission of the bank.

Insurer should decide whether commissions will continue after the expiry or termination of the agreement, and whether other compensation such as marketing allowance or IT allowance should be provided to the bank. Further, for any up-front payment made to the bank, insurer may consider whether there should be any clawback in case the sales targets are missed or early termination of the bancassurance agreement.

The insurer will lose exclusivity in respect of such bancassurance product.

This is more a commercial issue. Possible terms are the party proposing the product will have the IP rights and the other party will be restricted from developing similar products for other channels.

If the fee is paid upfront in a lump sum, insurer may consider clawback provisions so that part of the fees may be refunded in case of early termination or other events.

If the fees are paid by installments, the insurer may not be able to claw back those installments that have been paid. However, this is subject to negotiation between the parties.

The fees may be paid by installments agreed between the parties.

Yes. Indemnity provisions are common in bancassurance agreements. However, there is always a cap to such indemnity and the default party will usually not be responsible for indirect or consequential damages.

The issues include: representation from each party, quorum and frequency of meetings, the matters that should be discussed in the steering committee meetings (which should be management matters such as business plan, sales targets, new products, etc.). A mechanism has to be in place for resolution of deadlock situations. Usually, the matters will be escalated to the CEOs, failing which, to arbitration. In addition, a working committee may also be established to deal with the more daily routine matters.