Lapsed Agency Licence and Premium Handling

The main breaches are:

1. Acting without a licence. After 31 March the agent was not licensed, yet she solicited, negotiated, sold, and collected premium for an insurance product. Licensing rules generally prohibit any insurance intermediary activity without a current licence.
2. Using another agent's credentials. Submitting business through another agent's portal misrepresents who transacted the business and defeats the insurer's controls on licensing, training, and supervision.
3. Aiding unlicensed activity. Allowing an unlicensed assistant to complete and submit the proposal is a further breach; the assistant is also acting as an intermediary without a licence.
4. Improper commission sharing. Forwarding 70% of commission to an unlicensed person is generally prohibited, because it rewards unlicensed activity and creates a disguised payment for prohibited conduct.
5. Premium handling and receipting. Collecting cash and issuing a handwritten receipt on an insurer-branded form without proper authority raises misrepresentation and misappropriation risks. If the premium was not remitted promptly, that is a separate breach.
6. Failure to meet renewal conditions. The missing CPD and unpaid renewal fee are the root cause and are themselves compliance failures.

The conduct also raises fit-and-proper issues: dishonesty, use of another person's identity, and disregard of regulatory requirements.

Probably not, on these facts. Licensing is a regulatory requirement imposed on intermediaries; it does not automatically make the insurance contract void. The insurer accepted the premium, issued the policy, and held out the agent as its representative through the branded receipt and the proposal process. The client appears innocent and reasonably believed he was dealing with a licensed agent. The insurer may therefore be bound to assess the burglary claim on its merits.

The insurer can refuse only if the policy itself is void or voidable on a separate ground, such as material misrepresentation by the client, non-payment of premium, or breach of a policy condition. The intermediary's licensing defect is not, by itself, a policy defence. The insurer may have a claim against the agent and the other agent for breach of mandate, fraud, or indemnity, and may recover the commission, but it should not use the licensing breach to deny an otherwise valid claim.

That said, the insurer must investigate whether the client was complicit. If the client knew the agent was unlicensed and conspired to use another agent's credentials, the insurer may have a fraud defence. On the stated facts, there is no such evidence.

The insurer should immediately suspend the agent and the assistant from all insurance activity, preserve the file, and audit every policy submitted through the other agent's credentials. It should reconcile all premiums collected in cash, confirm that the USD 4,800 was remitted, and notify affected clients in writing that their policies remain in force and that they should deal only with authorised staff.

The insurer should report the matter to the regulator, recover the commission paid to the other agent, and consider claims against both agents for any loss. It should also review portal access controls, require multi-factor authentication, and prohibit sharing of credentials. A control should reconcile the licensed agent of record with the person who actually submitted the business.

The regulator may fine the agent, revoke or refuse renewal of the licence, impose a period of disqualification, and require restitution. The unlicensed assistant may be subject to enforcement action and prohibited from reapplying for a licence for a defined period. The other agent, who allowed use of his credentials, should also be investigated for failure to supervise and for enabling unlicensed activity. The client should be protected; the insurer should pay the valid burglary claim and then pursue recovery from the wrongdoers.