Commission Rebate, Proxy Signatures and a Fleet Owner
Sana has just passed her general takaful agent licensing requirements and joined a Karachi agency. Her team leader, Kamran, gives her 12 motor proposals from a “fleet owner”. The CNICs belong to 12 different individuals, but one company account pays all premiums, and Kamran asks Sana to sign each proposal declaration “on behalf of” clients who are not present. He also tells her to offer clients 25% of her commission as cashback, saying “everyone does it”. A client asks Sana to put in writing that any claim will be paid within seven days. Sana’s WhatsApp broadcast uses the SECP logo and says “government-approved takaful, 100% claim guarantee”. She has not checked whether the fleet owner is the beneficial owner of the vehicles or whether any client is a politically exposed person. The agency principal has a compliance manual but Kamran says it is “for show”.
1. Identify the regulatory, anti-money-laundering and conduct breaches in this scenario.
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Signing a proposal declaration for an absent client is a false attestation. The declaration is the client’s statement that the answers are true and complete; an agent may assist in completing a form but cannot sign it as the client. Doing so for 12 individuals creates a forgery and misrepresentation risk.
The payment pattern is an AML red flag: 12 unrelated CNICs, one company payer, no clear beneficial ownership and no PEP screening. The agent must identify the customer, the beneficial owner and the source of funds. A fleet owner may legitimately pay for drivers or employees, but that needs documentary support, not an assumption.
Offering 25% commission as cashback is an unlawful or at least prohibited inducement under market-conduct standards. It distorts advice and disadvantages clients who do not receive it. Promising a seven-day claim payment and “100% claim guarantee” is misleading, because claims depend on cover, documents and assessment. Using the SECP logo in a WhatsApp broadcast suggests official endorsement and is a serious misuse of a regulator’s identity. Kamran’s “for show” comment does not excuse any of this; the principal remains responsible for agency conduct.
2. What should Sana do immediately, and how should she document her actions?
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Sana should refuse to sign the declarations or pay any rebate. She should tell Kamran in writing that she cannot sign for clients, cannot offer cashback and cannot guarantee claims. She should ask each client to complete and sign their own proposal, provide CNIC and ownership documents, and explain the third-party payment. For the company payer, she should obtain the company’s registration, a board resolution or authority letter, and a list of vehicles and drivers.
She should conduct PEP and sanctions screening as required by the operator’s AML procedures and escalate any match. She should replace the WhatsApp broadcast with approved material, remove the SECP logo, and correct the guarantee statement. She should preserve the original messages and the proposals as evidence.
Her escalation should go to the agency principal and the operator’s compliance function, not only to Kamran. She should keep a dated file note of each refusal and each instruction. If the principal takes no action, she should consider her own regulatory position: her licence and reputation are personal, and “following orders” is not a defence to signing false declarations or paying prohibited rebates.
3. A client insists on the seven-day written guarantee. Draft a compliant response and explain the escalation route if the client complains later.
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Sana should reply: “I cannot guarantee a seven-day payment or a 100% claim guarantee. The takaful operator must assess the claim against the certificate, exclusions, waiting periods and documents. Once a complete claim is received, the operator has its published service standards, but the actual time depends on the survey and information required. I can give you the claims checklist and the complaint procedure, but I cannot promise an outcome.”
She should provide the policy wording, the claims notification contact and the operator’s complaint channels. If the client is dissatisfied later, he can complain to the operator first, then to SECP’s insurance division or the Federal Insurance Ombudsman where the complaint falls within its jurisdiction. Sana should record the client’s request and her response.
She should not sign a separate guarantee letter, even on agency letterhead, because it would create a false expectation and may bind the agency beyond the policy. If Kamran pressures her to sign, she should escalate to compliance and keep the written instruction. A client’s threat to go elsewhere is not a reason to misrepresent the product.