Hong Kong Insurance Authority suspends agent for ethical breaches in policy application process

Regulator emphasises importance of integrity in the industry

Hong Kong Insurance Authority suspends agent for ethical breaches in policy application process

Insurance News

By Roxanne Libatique

The Hong Kong Insurance Authority (IA) has imposed a suspension of 15 months on an ex-insurance agent for unethical practices.

The action was taken after the agent was found to have been involved in witnessing a client's fraudulent signature and the creation of a counterfeit beneficiary change form.

Insurance agent witnesses false signature

According to the IA, the issue stemmed from a life insurance application the agent managed for a client, intended to name the client's spouse as the insured individual. With the spouse unavailable to sign the necessary paperwork due to being outside of Hong Kong, the client unlawfully signed on his behalf. The agent compounded this violation by attesting to the forgery as a witness.

A subsequent failure by the agent to honour a request to designate the client as the beneficiary led to an attempt to cover this oversight by fabricating a beneficiary form after the spouse's death, and presenting it as if the client had filled it out.

Upon discovery, during a routine claim process initiated by the client after her husband's passing, the insurance company identified the falsifications, including discrepancies in the husband's travel records and the timing of the beneficiary form's submission. As a result, the insurance policy was nullified, leaving the client unprotected.

Insurance agent admits fault

Throughout the ensuing inquiry, the agent acknowledged her actions, from endorsing the initial application fraud to her subsequent efforts to mislead the insurer. These actions brought into question her professional ethics and suitability for her role, prompting the IA to take corrective action.

The IA noted the agent's admission of wrongdoing and cooperation as factors in the swift resolution of this case, viewing them as steps toward her professional redemption.

In determining the punitive measures under the Insurance Ordinance (Cap. 41), the IA considered a range of factors. These included the annulment of the policy, the agent's facilitation of the fraudulent application, her personal gain from the misconduct, her admissions of the wrongdoing, and the necessity of deterring similar misconduct in the future.

The insurance agent's 15-month suspension follows the seven-month ban on the license of an agent who committed unauthorised actions in handling a client's insurance policy.

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