IA, ICAC team up against sale of unlicensed insurance policies
IA, ICAC team up against sale of unlicensed insurance policies | Insurance Business Asia
Insurance News
IA, ICAC team up against sale of unlicensed insurance policies
The joint operation will be looking into the unlicensed sale to customers from Mainland China
Insurance News
By
Abigail Adriatico
Hong Kong’s Insurance Authority (IA) has announced that it had conducted its first joint operation with the Independent Commission Against Corruption (ICAC). The operation was focused on targeting the act of unlicensed selling of insurance policies to customers from Mainland China.
Through the operation, the IA and the ICAC executed search warrants on April 10 and 11 at four areas, which included offices of a licensed insurance broker firm as well as a referral company. The ICAC arrested an individual broker as well as a referrer.
The investigation surrounded the suspected act as well as incentivisation of referrers by a broker company in advising and selling insurance companies on its behalf despite the lack of license to do so.
The broker had offered to pay large referral fees on sales that were successful, which incentivised referrers to persuade Mainland China clients into buying long-term insurance policies from authorized insurers in Hong Kong. Some referrers were reported to be paid more than 90% of the commission the broker firm received.
The broker had submitted insurance application forms to insurers; however, the regulated activities were done by the referrers before the customers even engaged with the company. Apart from this, the broker and the referrer were also suspected of conspiring to include fraudulent information in the submitted application forms to Hong Kong insurers that were underwriting the policies.
“Our partnership with the ICAC in carrying out this joint operation demonstrates our shared determination to uphold proper sales practices in the insurance industry, ensure the market is founded on trust and integrity, and thereby provide confidence to all persons who look to the Hong Kong insurance market to meet their insurance needs,” said Peter Gregoire, head of market conduct and general counsel of the IA. “This close collaboration will continue not only through joint enforcement measures but also through industry training via the Hong Kong International Academy Against Corruption to enhance corporate governance standards and public education to empower consumers.”
“The ICAC will continue to closely collaborate with the IA, as well as other financial regulators, to combat corruption, illicit activities and misconduct relating to the financial sector. We will strive to maintain a fair business environment in Hong Kong, to sustain Hong Kong’s status as a clean international financial centre and to ensure the trust of stakeholders in the financial system,” said Ricky Yau Shu-chun, deputy commissioner and head of operations of the ICAC.
The joint operation was conducted as part of the memorandum of understanding that was signed by the two agencies in October 2023. As the investigation continues, the IA and the ICAC will not be making any further statements.
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