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Insurance Authority bans Ma Chun Kei for 4.5 years for fabricating a certificate of insurance

11 January 2024

The Insurance Authority (IA) has taken disciplinary action against Mr Ma Chun Kei (Mr Ma), a former technical representative of a broker company, by prohibiting him from applying for a licence for 4.5 years on the grounds that he is guilty of misconduct and not a fit and proper person after having fabricated a certificate of insurance for a professional liability and employees’ compensation insurance policy.

On 12 January 2022, Mr Ma assisted a client to purchase professional liability and employees’ compensation insurance covering the client’s role as a contractor on an interior renovation project for a period of 4 months commencing 13 January 2022. Mr Ma obtained a quotation from an insurer for the insurance. He claimed the client accepted the quotation on 12 January 2022 and that the insurer was informed about it. However, the insurer confirmed that it had not received any response to its quotation. On 13 January 2022, when the client asked about the insurance policy, Mr Ma said he would “give it to him later”.

Mr Ma was under the mistaken impression that the insurer was in the process of issuing the certificate of insurance, but that this was taking additional time due to the pandemic. Mr Ma, therefore, took matters into his own hands by altering an existing certificate of insurance issued by the same insurer, to fabricate a certificate of insurance for the client’s professional liability and employees’ compensation insurance. The fabricated certificate was sent to the client in the early hours of 14 January 2022. The incident came to light in March 2022 when a staff member of the broker company requested a copy of the relevant insurance policy from the insurer. Mr Ma subsequently admitted that he had no authority to create the certificate and his conduct amounted to a breach of the Code of Conduct for Licensed Insurance Brokers issued by the IA.

The fabricated certificate of insurance gave the client a false impression that it had a valid insurance policy, when this was not the case. Mr Ma’s conduct, therefore, exposed the client to the risk of incurring financial liability without insurance in place to cover such liability and also potential criminal prosecution for not having a valid employee compensation insurance policy. Thankfully, neither of these risks became manifest, with the client completing the project without sustaining any loss or and no criminal prosecution was commenced.

In considering this case, the IA notes Mr Ma had not only failed to pass on his client’s acceptance of the quotation to the insurer, but also he failed to rectify the matter by completing the insurance application process in March 2022 (after the incident had come to light) to ensure the client had valid insurance in place for the remaining period of the interior renovation project.

Members of the public rely on insurance brokers (including technical representatives) to carry on regulated activities in the interest of policy holders or potential policy holders to ensure their insurance needs are identified, evaluated and suitable insurance is arranged for their protection. It is vital, therefore, for members of the public to be able to trust in the integrity of the insurance brokers with whom they have dealings. For this reason, it is a baseline pre-requisite of the regulatory regime for insurance brokers to act competently, honestly, fairly, and to act in the best interest of the policy holder or potential policy holder concerned and with integrity when carrying on regulated activities.

Fabrication of an insurance document is a serious misconduct that carries with it potential criminal implications. The IA has zero tolerance for this and will not hesitate to impose severe disciplinary action to penalize and deter the occurrence (or recurrence) of such misconduct. Mr Ma, by his conduct, clearly violated the trust and integrity expected of an insurance broker. Certainly disciplinary action in the form of a lengthy ban, in the IA’s view, is justified.

In deciding the disciplinary sanction to be imposed under section 81 of the Insurance Ordinance, the IA has weighed all relevant circumstances including the following factors:

  1. The broker admitted his misconduct at the first available opportunity and expressed remorse over his conduct;
  2. He self-reported the incident to the IA voluntarily and co-operated with the IA’s investigation;
  3. He obtained no financial benefit and the client has not suffered any loss;
  4. He signed a Deed of Undertaking, inter alia, admitting his misconduct and undertook to indemnify the insurer against all losses in relation to the incident;
  5. He has misled the client and exposed it to potential financial loss and criminal prosecution;
  6. He failed to rectify the situation after the incident came to light in March 2022;
  7. He has been a licensed insurance intermediary for 26 years and has a clean disciplinary record; and
  8. There is a need to send a message to deter similar conduct.

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.