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Information Center > Press Releases > Insurance Authority bans former insurance agent for 18 months for fabricating a client’s instructions and forging the client’s signature

Insurance Authority bans former insurance agent for 18 months for fabricating a client’s instructions and forging the client’s signature

29 May 2023


The Insurance Authority (IA) has taken disciplinary action against a former insurance agent by prohibiting her from applying to be licensed for 18 months. The penalty was imposed because the agent was found not to be a fit and proper person after having forged the client’s instructions and fabricated the client’s signature on two separate occasions between December 2021 and January 2022.

On 30 November 2021, the agent received the client’s cheque as payment for annual premium in respect of two in-force insurance policies. The agent submitted the cheque to the insurer, but in the accompanying receipt inaccurately recorded the amount of premium payable for each of the two insurance policies. This resulted in insufficient premium being paid for one of the insurance policies and an overpayment being recorded for the other insurance policy. To rectify the mistake, in December 2021, the agent fabricated a letter from the client instructing the insurer to re-allocate premium from one insurance policy to the other. However, because the agent included wrong information in the fabricated instruction, it actually resulted in the increasing shortfall in premium for one of the insurance policies. In a further attempt to rectify the mistake, in January 2022, the agent fabricated a second letter of instruction from the client. Although this second fabricated letter was submitted to the insurer, before it was processed the client was notified by way of a Premium Overdue Notice that an automatic premium loan had been drawn down on the policy due to the premium shortfall. This resulted in the family members of the client contacting the insurer directly, at which point the truth was revealed.

Whilst the client did not sustain any financial loss as the insurer rectified the mistake shortly after discovery of the incident, the conduct of the agent was referred to the IA for investigation.

In considering this case, the IA notes that it is not the agent’s original mistake of wrongly completing the temporary receipt that demands disciplinary action. This was a human error (and the IA noted the health conditions put forward by the agent to explain this). Rather, disciplinary action is necessary because of the conduct of the agent in attempting to rectify the error. Integrity and good character are core attributes demanded of licensed insurance agents to be fit and proper to their role. Integrity means doing the right thing, even when that is the hard thing to do. Even if coming clean about an error with a client may result in the client conveying disappointment, this would have been the right thing to do and would have resulted in the original mistake being rectified quickly. Instead, the agent fabricated and submitted two letters of instructions, forging the client’s signature on each of them. These acts demonstrated a lack of integrity and an absence of good character resulting in the client’s interests being potentially harmed. The IA has no tolerance for conduct which displays such a lack of ethics and as such appropriate disciplinary action is necessary.

In deciding the disciplinary sanction, the IA has weighed all relevant circumstances in the balance, including:

  1. The fact that the agent had abused her position of trust with the client;
  2. The fact that the agent had admitted to fabricating the two letters and forging the client’s signature within a period of 1 month;
  3. The agent’s conduct was intentional and deliberate;
  4. The agent’s health condition;
  5. The fact that the client did not sustain any financial loss;
  6. The fact that the agent had been an insurance agent for approximately 21 years and has a clean disciplinary record; and
  7. The need to send a message to deter similar misconduct.

The IA also acknowledges the agent’s cooperation in accepting the disciplinary actions which has resulted in the prompt resolution of this matter1.

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.

Ends

Note:

1 Pursuant to section 84(1) of the IO, at any time when the IA is contemplating exercising a power under section 81, it may, if it considers it appropriate to do so in the interests of policy holders or potential policy holders or the public interest, by agreement with the person concerned (a) exercise a power that the IA may exercise in respect of the person under section 81; and (b) take an additional action that the IA consider appropriate in the circumstances of the case.