Insurance Authority imposes three-year ban on agent for premium misappropriation
Insurance Authority imposes three-year ban on agent for premium misappropriation | Insurance Business Asia
Insurance News
Insurance Authority imposes three-year ban on agent for premium misappropriation
Regulator reaffirms zero tolerance for failure to adhere to professional standards
Insurance News
By
Roxanne Libatique
The Insurance Authority of Hong Kong (IA) has issued a three-year prohibition order against a former insurance agent due to the inappropriate handling of premium payments, setting a precedent for strict regulatory oversight within the insurance industry.
The individual involved, who had a longstanding acquaintance with the policyholder dating back to secondary school, had inappropriately advised her in June 2019 to deposit her insurance renewal premium into his personal bank account for forwarding to the insurer. Following this advice, the policyholder transferred HK$33,835 in July 2019, which the agent then misappropriated, causing the policy to lapse in August 2019.
This breach of trust came to light as the policyholder sought confirmation of her premium payment over several months, only to be met with deceptive responses. The truth of the misappropriation was finally admitted by the agent in December 2019, and the repayment of the misused funds was made in instalments over the next year. The insurer reinstated the policy in October 2020.
Hong Kong Insurance Authority’s investigation and action
The IA’s investigation into this matter revealed that the agent had not only breached the trust placed in him by the policyholder but also violated the internal guidelines of his principal insurer and the regulatory standards that were in effect prior to the implementation of the new insurance intermediary regulations on Sept. 23, 2019.
The IA has reiterated its zero tolerance for the misappropriation of premiums and stresses the necessity for policyholders to always use the official payment channels provided by insurers to avoid similar incidents.
The IA said imposing this ban aims to convey a strong message against unethical practices in the industry, ensuring the protection of policyholder interests and maintaining the integrity of the insurance sector in Hong Kong.
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