The Insurance Authority (IA) of Hong Kong has issued a 14-year prohibition against a former insurance agent of Prudential Hong Kong Limited for misappropriating premiums from four policyholders.
The IA’s investigation revealed that between March 2017 and March 2019, the agent instructed policyholders to send their premium payments to his personal bank account. During this period, the policyholders transferred a total of RMB 2,346,237, believing the funds would be forwarded to Prudential. However, only RMB 87,151 was actually transferred to the company.
As a result of these actions, ten insurance policies lapsed due to non-payment, unbeknownst to the policyholders. Although the agent has since returned RMB 657,073 to Prudential, facilitating the reinstatement of five policies, Prudential is currently reaching out to the affected policyholders of the remaining five lapsed policies to offer assistance or compensation.
Further complicating matters, the agent delayed a policyholder’s access to her online account, preventing her from verifying her policy status directly with Prudential.
Investigation and Disciplinary Actions
During investigations by Prudential and the IA, the agent claimed his cousin, purportedly hired as his assistant, was responsible for handling the premium payments. However, the agent failed to provide any evidence of the cousin’s existence, suggesting an attempt to deflect blame.
The IA’s Disciplinary Panel, operating under the self-regulatory regime in place at the time, decided on a 14-year prohibition. The panel emphasized the importance of sending a strong deterrent message to the industry, 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. The IA is also 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. Public disciplinary actions against licensed insurance intermediaries can be found in the Register of Licensed Insurance Intermediaries on the IA website.
