Insurance Authority sounds alarm on fraudulent articles circulating online

Insurance Authority sounds alarm on fraudulent articles circulating online | Insurance Business Asia

Insurance News

Insurance Authority sounds alarm on fraudulent articles circulating online

Advice offered for affected individuals

Insurance News

By
Roxanne Libatique

The Insurance Authority (IA) of Hong Kong has warned the public about a fraudulent article circulating on two websites.

According to the regulator, the article falsely claimed that “Hong Kong Allianz Insurance” is backing an application called “Cerebras Online Investment Platform.”

The IA has reported the matter to the Hong Kong Police Force for investigation. It urges individuals who may have provided personal information or engaged in transactions with the platform to report the issue to local law enforcement authorities.

Phishing scam targeting Hong Kong insurer

In a separate announcement, the IA highlighted a phishing scam involving fake text messages sent under the name “香港年金文職,” purportedly from HKMC Annuity Limited (HKMCA).

The messages aim to deceive recipients into sharing personal information or performing unauthorised transactions.

HKMCA confirmed it is not associated with these messages. This matter has also been reported to the Hong Kong Police Force.

The IA advises anyone who has interacted with the fraudulent text messages to report the incident to HKMCA and the police immediately.

A former insurance agent was found guilty in the Hong Kong Magistrate’s Court and sentenced to three-and-a-half months in prison for mishandling insurance payments. The court also ordered the agent to compensate the victim for the funds misappropriated.

The case stemmed from an incident in 2020 when a client entrusted the agent with HK$60,000 in cash for premium renewal payments. The agent misappropriated the money, causing the client’s policy to lapse in 2021.

After reporting the issue to both the police and the IA, the agent was charged and convicted under Section 9 of the Theft Ordinance (Cap. 210).

The regulator stressed that the mishandling of premiums represents a serious violation of trust, warning that such offenses will lead to significant legal repercussions.

The updated rules require brokers to ensure that unlicensed referrers do not engage in regulated activities, such as offering advice or selling insurance policies.

Brokers are expected to carry out rigorous due diligence on their referrers, keep detailed compliance records, and regularly assess adherence to the new guidelines. Insurers working with these brokers are also required to uphold compliance through clear agreements and ongoing oversight. Failure to comply may result in suspension or revocation of licenses.

In addition, the IA has announced the introduction of fees for insurance intermediary licensing applications, effective from Sep. 23. This follows the expiration of a five-year fee waiver period that began when the IA assumed regulatory responsibility for intermediaries in 2019. The fees will cover the costs associated with the IA’s supervisory duties.

Restructuring of the Market Conduct Division

To strengthen oversight and enforcement, the IA has restructured its Market Conduct Division, splitting it into two separate entities: the Conduct Supervision Division and the Enforcement Division.

This move is designed to enhance focus on both compliance and enforcement activities.

The IA assured the industry that it will work closely with brokers, insurers, and other stakeholders to ensure a smooth implementation of the new compliance rules and fee structure.