Insurance Authority warns about misappropriation of premium payments

Insurance Authority warns about misappropriation of premium payments | Insurance Business Asia

Insurance News

Insurance Authority warns about misappropriation of premium payments

Doing it is an “unforgivable act of duplicity”

Insurance News

By
Noel Sales Barcelona

Hong Kong’s Insurance Authority (IA) has issued a warning to insurance agents about premium payment misappropriation, saying that they will be prosecuted to the full extent of the law.

The IA has caught the public’s attention after successfully winning a case against a former insurance agent who mishandled insurance payments. The Hong Kong Magistrate’s Court found the unnamed insurance agent guilty of the crime, sentencing the accused to three-and-a-half-months of imprisonment and to pay the victim compensation equivalent to the misappropriated premium.

Citing the case’s history, the IA saidvthat a client purchased an insurance policy from the agent in 2020 and passed HK$60,000 to the agent in cash to settle the renewal premiums, which were misappropriated and caused the policy to lapse in 2021.

After the incident, the client reported to the police and the IA, which led to the arrest of the unnamed suspect. The suspect pleaded guilty to an offence under Section 9 of the Theft Ordinance (Cap. 210) on April 22, 2024, the IA stated.

“Mishandling or misappropriating premium payments is a serious breach of trust and an unforgivable act of duplicity. We remind all industry practitioners that committing an offence of this nature will lead to dire consequences and urge policyholders to pay their premiums through official channels provided by the insurer,” the IA said.