The Poached Client List and the Rebate Offer
Ivan is a licensed insurance intermediary at Peak Wealth Agency. Before resigning to join Harbour Independent Brokerage, he exports a spreadsheet containing 380 client names, phone numbers, policy numbers, premium amounts and medical notes. He does not tell Peak Wealth. At Harbour, he sends WhatsApp messages to former clients: switch to me and I will rebate 30% of my commission, plus a free tablet. One recipient is Mr Ho, aged 78, who lives alone and has mild cognitive impairment. Ivan visits Mr Ho at home, completes the switch application without a financial needs analysis, and notes that the client wants higher return. Ivan has completed only 6 of the required CPD hours for the year and asks a colleague to sign his attendance record for a three-hour ethics seminar he did not attend. Peak Wealth discovers the downloaded client list and complains to the Insurance Authority.
1. Discuss Ivan's confidentiality and data protection obligations when moving to Harbour.
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Client names, contact details, policy numbers, premium amounts and medical notes are confidential and sensitive personal data. Ivan acquired them through Peak Wealth for Peak Wealth's business, not as a personal asset he can take to a competitor. His employment or agency agreement and the Personal Data (Privacy) Ordinance limit his use of the data to the purposes for which it was collected. Exporting the spreadsheet before resignation is likely to breach those obligations unless Peak Wealth gave specific informed authorisation, which the facts do not show.
Harbour should not accept or use the downloaded list. It should have its own onboarding, consent and record-keeping process. Ivan should return or delete the data and not contact former clients using it. The fact that he already knew some clients personally may allow lawful contact in limited circumstances, but it does not justify transferring policy and medical details. Peak Wealth should preserve evidence and consider notification and legal advice.
2. Is the commission rebate and tablet offer acceptable? How should Harbour assess the switch for Mr Ho?
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Offering to rebate 30% of commission and a free tablet to secure a switch is an inducement that creates a serious conflict and is likely to breach the conduct requirements on remuneration and fair dealing. It encourages replacement business without showing that the new product is better for the client. The offer should stop, and any switch already submitted should be reviewed.
Mr Ho requires particular care. He is 78, lives alone and has mild cognitive impairment. Harbour should assess whether he understands the switch, whether a family member or trusted person should be involved with his consent, and whether the existing policy has features, surrender values or health cover that would be lost. A financial needs analysis and product comparison are essential. The agent must record the client's objectives, the disadvantages of switching, and why the new policy is suitable. Pressure selling or exploiting a vulnerable client is a fit and proper issue, not merely a training point.
3. What are the consequences of the CPD and attendance record issues, and how do they affect fit and proper status?
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Licensed insurance intermediaries must meet the applicable continuing professional development requirement each year, including the prescribed ethics or compliance content. If Ivan has completed only 6 hours and has not made up the shortfall through genuine training, he is not compliant. Asking a colleague to sign for a seminar he did not attend is worse than a mere CPD shortfall: it is dishonest record-keeping and may involve the colleague in misconduct.
Fit and proper status depends on honesty, integrity and compliance, not just examination passes. Falsifying attendance records can lead the Insurance Authority to question whether Ivan is fit to remain licensed, and Harbour's supervision may also be examined. The colleague who signed the false record faces separate risk. The proper response is to correct the record, complete genuine CPD, report the matter internally and cooperate with any investigation. A rebate offer, vulnerable-client switch and false CPD record together present a pattern that a regulator would assess as a serious integrity concern.