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【Guardian God Decoded】Paid premiums but no policy issued: how can consumers protect themselves?
The plot of the online drama Guardian Angel: Insurance Investigators mentions an elderly resident at a care home who claimed to have bought insurance, but discovered when applying for a surgical expense claim that he had never actually taken out a policy with the insurance company. Suspicion fell on the insurance intermediary, Yip Tze (played by Nancy Sit). Following Cheung Tung’s (played by Michael Miu) investigation, it was discovered that the care home director had committed fraud: although multiple policies had been signed, he had not arranged insurance for all of them through Yip Tze, but had instead secretly kept most of the premiums. So, in reality, how can we avoid similar incidents?
An Inconceivable Plot: The Care Home Director Selling Insurance on Someone Else’s Behalf?!
The director collected premiums and policy applications at the care home on behalf of the insurance intermediary, before passing them to Yip Tze to process with the insurance company. In this situation, if the director did not hold an insurance intermediary licence but sold insurance products to others, this would constitute a breach of the relevant insurance regulations.
In addition, as an insurance intermediary, Yip Tze had a responsibility to meet customers when arranging policies, understand their needs in a professional and responsible manner, and verify that the policyholders genuinely existed. For certain types of insurance, such as whole-of-life critical illness insurance, the intermediary must also conduct a financial assessment of the policyholder before purchase.
Policyholders Should Know How to Prevent Intermediaries from Misappropriating Premiums
The misappropriation of premiums described in the drama is not uncommon. According to data from the Insurance Agents Registration Board, more than one-third of complaints^ involve insurance agents misappropriating premiums or mishandling premium payments. How can we avoid this?
When purchasing insurance, we should ensure that payments are not mixed with the intermediary’s personal funds and retain records of payment.
If you take out insurance through an insurance agent, Guideline 5 of the Insurance Agents Registration Board (see Note 1) recommends the following preferred methods of paying premiums:
- payment by cheque made payable to the insurance company*; or
- payment by credit card／direct deposit／direct transfer from the customer’s bank account to the insurance company’s account
*(Editor’s note) If insurance is arranged through a brokerage company (broker), the payee may instead be the brokerage company. Policyholders should check whether the brokerage company genuinely exists by consulting the registers of the Hong Kong Confederation of Insurance Brokers (CIB) or the Professional Insurance Brokers Association (PIBA).
As cash payments are difficult to trace, they are not an ideal method of payment. If it is genuinely necessary to pay in cash, the policyholder should pay the premium in person at the insurance company’s customer service centre or a designated location, and retain the receipt.
Sometimes, an insurance intermediary may ask a customer to sign a credit card authorisation form to pay the premium. When signing, the policyholder should confirm that the payee is the insurance company. When paying by bank transfer, the policyholder should check the account number to ensure that the payment is successfully transferred to the insurance company.
All of the above methods can effectively reduce the risk of intermediaries misappropriating premiums. Assuming underwriting is successful and the insurance company accepts the application, it will notify the policyholder and issue an official receipt, the policy and the policy terms and conditions. The policyholder should retain these documents for record purposes. If the policyholder has still not received notification from the insurance company within two weeks of paying the premium, they should make enquiries with both the insurance intermediary and the insurance company to avoid a situation in which premiums have been paid but no insurance has been arranged.
(Note 1) Hong Kong Federation of Insurers, Code of Practice for the Administration of Insurance Agents
^Cited from Guideline 5 of the Committee on the Code of Practice for the Administration of Insurance Agents of the Hong Kong Federation of Insurers
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.
10Life Editorial Team
Our team of professional content researchers focussing on insurance
10Life Editorial Team
Our team of professional content researchers focussing on insurance
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