The Agent Who Signed for the Client

The insurer's position is weak, and the execution argument is likely to fail.

1. Valid execution. The general rule is that a person who cannot write may execute a document by making a mark (a thumbprint) which is authenticated. The thumbprint here is the client's mark. The agent's signature, expressly labelled as signed on the client's behalf, is at worst an irregularity in the manner of attestation, not a failure of execution. The client's mark, coupled with the agent's contemporaneous note, is capable of constituting a valid execution. The insurer would need to show the client did not adopt the document; the thumbprint suggests the opposite.

2. Agency and authority. An agent who completes a proposal form for an illiterate client acts within the ordinary scope of an agent's authority, provided he records the client's answers faithfully. The agent's signature is evidence of how the form was completed, not of a separate contract. The insurer appointed the agent and is fixed with his acts within that authority.

3. The insurer cannot take the benefit and disclaim the burden. The insurer accepted premiums for 11 months and issued the policy. Having accepted the benefit of the contract, it cannot later say the contract was never validly formed because of a defect in its own agent's paperwork.

4. The real issue is the agent's conduct, not the client's. The agent failed to explain the suicide exclusion, the surrender scale, and the free-look right. That is a conduct failure by the insurer's distribution channel. The insurer bears responsibility for its agent's failures in the sale of its product.

Conclusion: The insurer should pay the claim. It may pursue the agent internally for the conduct failures, but it cannot use its own paperwork defect to defeat a genuine claim.

Three categories of consequence arise.

1. Mis-selling and disclosure failures. The free-look right, the surrender-value scale and material exclusions are core disclosure items. An insurer's conduct rules (and equivalents in most markets) require that these be explained in a way the customer can understand, with particular care for vulnerable customers - an illiterate 62-year-old is a textbook vulnerable customer. Failure to explain is a breach of the insurer's own conduct obligations, not merely the agent's.

2. Suitability and the sales process. The agent should have used a documented process for customers who cannot read: a witnessed reading, an independent interpreter, a recorded explanation, and a signed confirmation by a witness. The absence of such a process is a systemic weakness, not a one-off.

3. Regulatory exposure. The beneficiary's complaint to the regulator will likely lead to a review of the agent's file, the insurer's onboarding controls, and possibly a market-conduct review. Sanctions can include fines, remediation orders, and requirements to review similar files.

How the insurer should respond:

• Pay the claim without further argument, and confirm this to the regulator.
• Conduct a file review of all policies sold by this agent to vulnerable customers and remediate any similar failures.
• Refer the agent for disciplinary action under the agency agreement, and consider whether his appointment should continue.
• Strengthen onboarding: require a witness signature and a documented explanation for any customer who cannot read, and add a vulnerable-customer check to the sales checklist.
• Report the root cause to the regulator proactively rather than waiting to be asked.

The lesson is that the agent's signature was a symptom; the disease was a sales process that had no way of protecting a customer who could not read.