The Insurance Authority (IA) of Hong Kong has prohibited a former insurance agent of Prudential Hong Kong Limited (Prudential) from applying for a license for 14 years due to misappropriating premiums from four policyholders.
Between March 2017 and March 2019, the agent directed policyholders to send premium payments to his personal bank account.
The policyholders transferred a total of RMB 2,346,237, under the impression that the agent would forward these payments to Prudential. However, only RMB 87,151 was actually transferred.
This misappropriation led to the lapse of 10 insurance policies due to non-payment, unbeknownst to the policyholders. Although the agent has since returned RMB 657,073 to Prudential, allowing the reinstatement of five policies, Prudential is currently contacting the affected policyholders of the remaining five lapsed policies to offer assistance or compensation.
The agent further complicated the situation by delaying a policyholder’s access to her online account, which would have allowed her to verify her policy status directly with Prudential.
During investigations conducted by both Prudential and the IA, the agent claimed that a cousin, allegedly hired as his assistant, was responsible for handling the premium payments.
The agent failed to provide any evidence of this cousin’s existence, revealing an attempt to deflect blame.
The IA’s Disciplinary Panel, adhering to the rules of the self-regulatory regime applicable at the time, decided on a 14-year prohibition.
The panel emphasised the need to send a strong deterrent message to industry practitioners, stating, “one bad apple spoils the barrel; we need to send a strong deterrent message to all our practitioners and the industry.”
Under current regulations, the IA could impose a lifetime ban. Additionally, the regulator is referring this case to other law enforcement agencies under existing Memorandums of Understanding.
For more information on the IA’s enforcement activities, visit the “Enforcement News” section of the IA’s website. Meanwhile, public disciplinary actions against licensed insurance intermediaries can be found in the Register of Licensed Insurance Intermediaries on the IA website.
The ban follows the IA’s notice about a deceptive website that falsely presented itself as the official platform of a legitimate insurance provider in Hong Kong – Newco Insurance Services Limited (Newco).
