Core Viewpoint - The Hong Kong Insurance Authority has set a cap on the demonstration interest rates for dividend insurance policies, limiting Hong Kong dollar policies to a maximum of 6% and non-Hong Kong dollar policies to 6.5%, effective from July 1, 2025 [2][10]. Group 1: Market Dynamics - There has been a surge in mainland Chinese clients traveling to Hong Kong to purchase dividend insurance policies before the new regulations take effect, with many seeking to lock in the current higher expected returns [3][6]. - The demand for dividend insurance has increased significantly post-COVID-19, as mainland clients are drawn to the relatively higher returns compared to domestic insurance products [10][12]. - Insurance agents have reported a dramatic increase in business, with some agents experiencing explosive growth in policy signings during this period [7][6]. Group 2: Regulatory Changes - The new guidelines aim to standardize the demonstration interest rates to prevent misleading marketing practices that could create unrealistic expectations among clients [11][12]. - The cap on expected returns is intended to encourage insurance companies to manage investment returns more prudently and ensure more stable dividend realization rates [16][12]. Group 3: Client Considerations - Clients are advised to approach their insurance purchases with caution, considering their actual needs and the potential risks associated with non-guaranteed returns [4][8]. - The expected returns from dividend insurance policies can vary significantly based on the duration of the policy, with longer-term policies potentially seeing larger discrepancies in returns due to the new caps [14][15]. - Factors such as currency exchange risks and the performance of the insurance company's investments can impact the actual returns received by policyholders [17][10].