IIQE Paper 1 Regulatory Framework of Insurance Industry question: minimum limit of indemnity

Answer: A. HK$75,000,000

Answer: HK$75,000,000. Working: 2 x HK$50,000,000 = HK$100,000,000, but the 2 x income limb is capped at HK$75,000,000; that exceeds the HK$3,000,000 floor, so the minimum is HK$75,000,000.Why not the others:• HK$100,000,000: this ignores the HK$75m cap.• HK$103,000,000: this ignores the cap and adds the floor.• HK$150,000,000: this uses 3 x income; the multiple is 2.Watch out: Forgetting the HK$75 million cap on the income-based limb.Rule: The policy must also give at least one automatic reinstatement of the limit.Source: IA P1 Study Notes 2024 Ed. §6.2.5(g)(ii), p.6/79; Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Cap. 41L) r.3-7 (e-Legislation, checked 31 Oct 2026)