HKIA fines broker for inadequate indemnity insurance coverage

One company failed to segregate client monies from its own funds.

Hong Kong’s Insurance Authority (HKIA) has publicly reprimanded Century Investment Planning Limited for failing to segregate client monies from its own funds and imposed a $1,528.7 (HK$12,000) fine on another insurance broker for inadequate professional indemnity insurance coverage.

Century Investment Planning Limited, a former licensed insurance broker, repeatedly failed to deposit client monies into a separate account, misused the funds, and delayed premium payments to an insurer.

These breaches violated the guidelines under the previous self-regulatory regime and the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Cap. 41L).

In a separate case, another broker firm miscalculated the amount of professional indemnity insurance required, resulting in a shortfall of $1.5m (HK$11.8m). 

The HKIA noted that no policyholders were harmed and that both firms cooperated fully during the disciplinary process.

The HKIA reiterated that strict compliance with client money segregation and adequate insurance coverage is essential to protect policyholders, and firms that fail to meet these standards will face proportionate regulatory action.

($1.00 = HK$7.85)