Chow Tai Fook Life Insurance Co Ltd (Incorporated in Bermuda With Limited Liability) v. Luk Kin Hang

On 2 October 2026, Deputy District Judge Patrick Siu handed down judgment in Chow Tai Fook Life Insurance Co Ltd v Luk Kin Hang [2026] HKDC 1755, allowing the insurer's claim to claw back HK$1,356,009.36 in conditional performance bonuses from its former agent. Mr Jeffrey Lee, instructed by Messrs Kennedys, acted for the successful Plaintiff.

The Defendant was engaged as an insurance agent under an Agent's Contract dated 24 July 2017, alongside a Side Agreement governing conditional performance bonuses (CPBs). He received three CPBs of HK$715,623 each. On 28 April 2021, the Plaintiff served notice terminating the Agent's Contract under clause 10.1, which permitted termination on 30 days' written notice without cause. The termination took effect on 28 May 2021, falling within the 37th-48th performance bonus month window under clause 3(c) of the Side Agreement. By Table 6, the Defendant became liable to repay 40%, 50% and 100% of the three CPBs respectively, totalling HK$1,359,683.70, less a commission set-off of HK$3,674.34.

The Defendant raised two defences. First, he argued the Plaintiff had wrongly assessed his performance by reference to a 25-month LIMRA persistency rate when the Side Agreement specified a 19-month rate. Second, he contended the second addendum gave him until 30 June 2021 to produce HK$300,000 in annualized first year commission, and the Plaintiff had prematurely terminated his contract, depriving him of that opportunity.

The Court held that:

(1) The termination was validly exercised under clause 10.1, which required no reason and only 30 days' written notice. The 19-month versus 25-month persistency distinction was irrelevant to the termination right; clause 3(a)'s reference to the 19-month rate concerned only the clawback calculation, not the Plaintiff's broader discretion to monitor agent performance (§§15-17).

(2) The second addendum expressly preserved the Plaintiff's right to terminate before 30 June 2021 and to claw back the CPB in that event. The Defendant's annualized first year commission from August 2020 to April 2021 was only HK$14,970.12, making it unrealistic to expect him to meet the target by 30 June 2021 (§§19-20).

(3) No implied term of good faith should be implied into the termination clause. The court followed Shek Kin Pong v FTLife Insurance Co Ltd [2019] HKCFI 1781 and Cheung Li On v Sun Life Hong Kong Ltd [2021] HKCFI 3784, holding that an implied term cannot contradict express provisions and Hong Kong law does not recognise a general duty of good faith in contract performance (§§28-32).

(4) Even assuming such an implied term existed (per WD Life Insurance Company (Bermuda) Ltd v Poon Cindy [2019] 3 HKLRD 455), the Plaintiff had legitimate commercial reasons for termination based on the Defendant's persistently poor persistency rates, and had given him multiple opportunities to improve (§§35-36).

Judgment was entered for HK$1,356,009.36 plus pre-judgment interest at 7% p.a. or HSBC prime +3%, whichever was higher, from 28 May 2021 until judgment, and thereafter at judgment rate. Costs were awarded to the Plaintiff on an indemnity basis with certificate for counsel.

For practitioners advising on insurance agent bonus clawback disputes: the termination clause's express "without cause" language remains effective, and post-Poon Cindy arguments about implied good faith will likely fail where the insurer can demonstrate genuine performance concerns and a documented history of warnings or opportunities to improve.