Insurance Authority revokes insurance agent’s licence and imposes 11-month ban for misconduct in handling client’s premium

27 January 2023

The Insurance Authority (IA) has taken disciplinary action against an insurance agent by revoking the agent’s licence and prohibiting her from applying to be licensed again for 11 months. The penalty has been imposed because the agent was found not fit and proper in the way she handled certain premium received from her client.

On 2 October 2018, the agent received monies from her client into her personal bank account so she could pay it onto her appointing insurer. The premium was for the purpose of reinstating the client’s insurance policy which had lapsed on 28 September 2018. The agent did not, however, pay the premium onto her appointing insurer until 3 September 2019, some 11 months later.

During this 11-month period, the agent made misleading statements to both her client and her appointing insurer. The agent informed her client that she had paid the premium onto the insurer (when she had not done so) leading her client to believe that the insurance policy had been reinstated (when it had not been). The agent also informed the insurer that the client would be paying the monies by internet banking (when the client had already paid the monies to the agent).

Whilst the insurance policy was eventually reinstated, after the client contacted the insurer directly and found out the truth, during the 11-month period prior to reinstatement, the client had been left without insurance coverage without even knowing it. Accordingly, not only did the insurance agent’s actions and omissions in this case fall well below the standards one would expect from a professional insurance agent, but they also demonstrated a clear lack of integrity and ethics. By her actions the agent breached the trust and integrity on which the insurance market must be founded and has rendered herself not fit and proper to be an insurance agent.

The agent cited certain issues ongoing in her personal and family life at the time as reasons for her not fully focusing on her work during this period. Whilst the IA has taken these factors into account in mitigation, they in no way excuse the substantial delay in the agent paying the premium onto her appointing insurer or the misrepresentations she made. Insurance agents (as is the case with all professionals) are obliged to comply with minimum standards of ethical conduct that are applicable to their profession, in spite of the personal difficulties they may encounter in their day-to-day lives. A person of true integrity remains true to their professional ethical principles at all times, especially when faced with challenging situations, personal or otherwise.

Since the facts of this case took place before the current regulatory regime for insurance intermediaries came into force (on 23 September 2019), the IA has decided this case by applying the applicable rules in place at the time. In deciding the disciplinary sanction, the IA has weighed all relevant circumstances in balance, including:

1. The seriousness of the agent’s conduct;
2. The fact that agent’s conduct left her client without the certainty of insurance coverage until the insurance policy was eventually reinstated after 11 months;
3. The personal and familial difficulties the agent was facing at the time;
4. The fact that the agent has shown eventual remorse and received no financial benefits as a result of the incident; and
5. The need to send a deterrent message against mishandling of premium (a matter for which the IA has no toleration).

A full Statement of Disciplinary Action can be found here. For further information on the IA’s enforcement work, please see the “Enforcement News” section of the IA’s website. Public disciplinary actions against licensed insurance intermediaries may also be searched on the Register of Licensed Insurance Intermediaries on our website.

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