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The storyline of the TV drama *Guardians of Insurance Investigation* mentions an elderly resident at a nursing home who claimed to have purchased insurance. However, when applying for surgical expense claims, it was discovered that no policy had been taken out with the insurance company. Suspicion fell on the insurance intermediary, Yip Zi (played by Jessica Hsuan). After an investigation by Cheung Tung (played by Michael Miu), it was revealed that the nursing home director had committed fraud by signing multiple policies but not fully passing them to Yip Zi for processing, instead pocketing most of the premiums. So, in reality, how can we prevent such incidents from happening?

Unbelievable Plot: Nursing Home Director Selling Insurance on Behalf of Others?!

The director of the nursing home collected premiums and policy documents on behalf of the insurance intermediary and then handed them over to Yip Zi for processing with the insurance company. In such a scenario, if the director does not hold an insurance intermediary licence and is promoting insurance products to others, this would be a violation of insurance industry regulations.

Moreover, as an insurance intermediary, Yip Zi also has a responsibility to meet with the client when signing the policy, to understand the client’s needs with a professional and responsible attitude, and to verify the existence of the policyholder. For certain types of insurance (such as lifelong critical illness coverage), intermediaries are required to conduct a financial assessment for the policyholder before purchase.

Preventing Intermediaries from Misappropriating Premiums: What Policyholders Need to Know

The misappropriation of premiums described in the drama is not uncommon. According to data from the Insurance Agents Registration Board, over one-third of complaints^ involve insurance agents misusing or mishandling premiums. How can we avoid such situations?

When purchasing insurance, we should ensure that payments are not mixed with the intermediary’s personal funds and keep records of all transactions.

If purchasing through an insurance agent, Guideline 5 (see Note 1) from the Insurance Agents Registration Board suggests more ideal methods for premium payment, including:

Paying by cheque, made payable to the insurance company* or
Paying by credit card/direct deposit/direct transfer from the customer’s bank account to the insurance company’s account

*(Editor’s Note) If purchasing through a brokerage firm (broker), the cheque may be made payable to the brokerage firm. Policyholders should verify the existence of the brokerage firm by checking the registers of the Hong Kong Confederation of Insurance Brokers (CIB) or the Professional Insurance Brokers Association (PIBA).

Paying in cash is not ideal as it is difficult to trace. If cash payment is unavoidable, policyholders should personally visit the insurance company’s customer service centre or a designated location to pay the premium and retain the receipt.

Sometimes, insurance intermediaries may ask clients to sign a credit card authorisation form for premium payment. Policyholders should confirm that the payee is the insurance company when signing. When paying via bank transfer, policyholders should verify the account number to ensure the funds are successfully transferred to the insurance company.

The above methods can effectively reduce the risk of intermediaries misappropriating premiums. If underwriting is successful and the insurance company accepts the application, they will notify the policyholder and issue an official receipt, policy document, and policy terms. Policyholders are advised to retain these documents as records. If the policyholder does not receive notification from the insurance company within two weeks of paying the premium, they should contact both the insurance intermediary and the insurance company to avoid situations where premiums are paid but no policy is issued.

(Note 1) Hong Kong Federation of Insurers *Code of Practice for the Administration of Insurance Agents*

https://www.hkfi.org.hk/pdf/tc/download/c_CodePractice_2010.pdf

^Cited from Hong Kong Federation of Insurers *Code of Practice for the Administration of Insurance Agents*, Committee Guideline 5

https://www.hkfi.org.hk/pdf/tc/download/c_CodePractice_2010.pdf

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.

Last updated: 9 Apr 2026

10Life Editorial Team

Our team of professional content researchers focussing on insurance

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10Life Editorial Team

Our team of professional content researchers focussing on insurance

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