September 2026
As highlighted in the previous issue of Conduct in Focus1, agent managers play a vital role in setting the ethical conduct culture across an insurer’s agency force. Given their influence over the conduct of their teams, the actions and decisions of agency managers – and the examples they set - can have far-reaching consequences for compliance standards and customer treatment.
Recent enforcement cases demonstrate the IA’s approach in holding agent managers accountable for their conduct. The IA will scrutinise an agent manager’s conduct to ensure it is consistent with the “fit and proper” requirements under the Insurance Ordinance to serve as an insurance agent. In particular, an agent manager’s fitness and properness may be undermined if he or she encourages, facilitates or conceals misconduct by their downlines. The following cases illustrate this.
In February 2026, the IA banned a former licensed individual insurance agent for her improper directions to a downline agent. The case stemmed from the downline agent’s submission of a false academic certificate to his insurer.
When the insurer commenced an internal inquiry, the downline agent confessed to his agent manager that he – the downline agent - had not graduated from the institution concerned, and the qualification he had submitted was false.
Rather than advising him to come clean about this, the agent manager directed the downline agent to double-down on the lie during the IA’s investigation.
The agent manager prepared a draft response for the downline agent, to the effect that the institution’s confirmation of the qualification’s falsity had arisen from a misunderstanding. She then directed the downline agent to submit the deliberately misleading response to the IA.
Two obvious points emerge from this:
Firstly, by preparing a misleading response and directing the downline agent to submit it to the IA, the agent manager effectively aided and encouraged the provision of misleading information to the regulator. Such unethical, nonsensical and misguided conduct sought to undermine the regulatory process, which exists to protect the interests of policyholders and underpin the insurance market with trust. When concerns arise regarding fitness and properness, the appropriate response is to be open and to cooperate with enquiries from insurers and regulators, by answering them without telling an untruth. Attempts to conceal relevant facts or perpetuate inaccurate information, only deepens the lack of the fitness and properness that will inevitably be discovered, and exacerbate the resulting penalty and loss of reputation arising from the individual’s dishonesty, lack of reliability and absence of integrity.
Secondly, this case demonstrates the connection between unethical downline agent behaviour and unethical management. Corporate culture trickles down from the top. Downline agents look to agent managers to set the example. If that example is unethical, misconduct by downline agents is an inevitable result. Rather agent managers must promote honesty, integrity and compliance across their teams.
The right thing to do in this case would have been to inform the downline agent to be candid about the false qualification, tell the truth and cooperate fully with the insurer’s inquiry. Instead, the agent manager chose to take the wrong, misleading and unethical route and, in doing so, demonstrated her own lack of fitness and properness to serve in her role. She was deserving of the penalty meted out.
In May 2026, the IA imposed a ban on a former licensed individual insurance agent for lack of fitness and properness, after finding that she had facilitated a downline agent to conduct mandatory provident fund (MPF) related activities before he had been registered as an MPF subsidiary intermediary (SI).
The downline agent, a new recruit who had not yet been registered as an MPF SI, wished to provide service to a client’s MPF account, and he approached his agent manager for assistance. The agent manager, who was a registered MPF SI at the time, was asked to sign and submit an application to consolidate the client’s MPF accrued benefits as the handling MPF SI on record. She acceded to the downline agent’s request and provided the login credentials of her staff account to him. The downline agent accessed her account to complete the application. After the agent manager reviewed the completed consolidation application bearing signatures purportedly made by the client, despite not having met or contacted the client, she signed and submitted the same because she believed the downline agent had already explained the application to the client and obtained the client’s consent. The application was processed but the client later complained to have neither signed nor authorised the application.
The IA considered the agent manager’s conduct to be particularly serious because the agent manager knew that the downline agent was not registered as an MPF SI at the material time. Instead of stopping the downline agent from engaging in unregistered MPF-related activities, the agent manager facilitated the transaction by signing and submitting the consolidation application as the handling MPF SI. In doing so, she assisted the downline agent to conduct unregistered MPF-related activities and misled the principal trustee into believing she had carried out the relevant MPF-related activities (when she had not).
In assessing whether an individual is fit and proper, the IA must have general regard to the person’s ability to carry on regulated activities competently, honestly and fairly, as well as the person’s reputation, character, reliability and integrity. Accordingly, conduct undertaken in other capacities may be taken into account when assessing whether the individual remains fit and proper to be licensed under the Insurance Ordinance..
Licensed individual insurance agents in supervisory positions must never use their status, resources or influence to enable others to circumvent legal or regulatory requirements. When a licensed individual insurance agent knowingly facilitates such misconduct, it seriously impugns the agent’s honesty, reliability and integrity.
The facts of these two cases are different, but they share a common feature. In both instances, the conduct arose from how the agent managers chose to engage in wrongful conduct in their managerial roles when being approached by their downline agents. Rather than acting as a gatekeeper against wrongdoings, and setting a proper ethical example, each of them became a facilitator and eventually (and rightly) faced disciplinary action themselves.
These enforcement outcomes reinforce the standards expected across the industry and underscore the responsibilities that come with an agent manager’s position of trust and influence. Agent managers are expected to promote compliant and appropriate conduct, provide effective supervision and foster a culture of ethical business environment and fair customer treatment. Where they fail to meet these standards and their fitness and properness is called into question, the IA will take appropriate disciplinary action to protect customers, uphold professional standards and maintain confidence in Hong Kong’s insurance market.
For the latest news on our enforcement work, please check out details of the other disciplinary actions taken by the IA which can be found on “Enforcement News” on the IA’s website.
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