Hong Kong Insurance Authority suspends agent over unauthorised policy actions

Reminder issued for industry professionals

Hong Kong Insurance Authority suspends agent over unauthorised policy actions

Insurance News

By Roxanne Libatique

The Insurance Authority (IA) of Hong Kong has imposed a seven-month suspension on the license of Lam Kwan, a decision driven by his unauthorised actions in handling a client's insurance policy.

According to the IA, Kwan acted without consent, filling out an insurance application in the name of a client and even signing it on her behalf, all while covering the first premium payment of HK$8,009.66 himself. The client stumbled upon this unauthorised transaction during a routine check of her policies through the insurer's online platform. Given her absence from Hong Kong at the time and the lack of any authorisation for Kwan to act, she sought explanations from him, which proved unsatisfactory. Her subsequent complaint to the IA led to the discovery of Kwan's deceit.

Investigations further unravelled Kwan's scheme, wherein he falsely informed the client about her participation and supposed win in a non-existent lucky draw sponsored by his insurer. It was later admitted by Kwan that this fabrication was intended to artificially inflate his sales performance for better positioning on the insurer's “annual list,” an act that cost him financially but was aimed at motivating his team towards greater sales achievements.

Suspension of Lam Kwan's license

The IA argued that Kwan's actions represent a serious violation of professional ethics, involving deception not only towards the client but also the insurance company he represented.

The IA's decision to suspend Kwan's licensing was influenced by several factors, including his direct involvement in the fraudulent application process, his betrayal of trust, the personal motivations behind his actions, and his otherwise clean disciplinary record over a 17-year career.

Reminders for Hong Kong insurance industry

This disciplinary action is part of the IA's broader effort to deter similar misconduct in the industry.

“[The case] serves as a warning to licensed insurance intermediaries never to use deceitful practices to seek to trick clients,” the IA said. “Secondly, the case serves as a reminder that even when a lucky draw or time-limited discount or promotion is true, a prospective policy holder should not let the sense of fear of missing out, or ‘FOMO,’ which these promotions aim to foment, disproportionately influence, or serve as a distraction in making a buying decision.

“Thirdly, in this case, the client discovered the problematic insurance policy by checking her e-portal account with the insurer. This reinforces the value of policy holders regularly checking on their insurance coverages through facilities like e-portals provided by insurers.”

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