"No Blind Spots" Employee Background Checks | Geographic Scope should not be limited

Recently, reports emerged about a lawyer in mainland China who was involved in bribery and had his license revoked by the authorities, who then came to Hong Kong to register as an insurance agent. This situation reveals that most background checks are not comprehensive and fail to cover candidates' misconduct or relevant records outside of Hong Kong. Such a situation could significantly impact a company's reputation and image, and more seriously, it could undermine consumer or stakeholder confidence in the business.

In September 2024, the Insurance Industry Association launched the first phase of a background verification program for insurance intermediaries to determine whether insurance agents have previously engaged in misconduct activities. The industry hopes that this program can be expanded to include bank insurance practitioners. This initiative has received support from The Hong Kong Monetary Authority and regulatory bodies, and it is expected to be implemented in January next year.

Investigation items for licensed individuals in various industries should be comprehensive:
• Identity and Personal Background Vetting
• Education Vetting
• Employment Vetting
• Disqualification Vetting
• Irregularity and Disciplinary Action Search
• Litigation Search
• Criminal Record Search
• Adverse Media Record Search
• Global Compliance Check

Apart from the banking and insurance industries, license holders or executives in other sectors should also be regulated under the same standards. Investigations into irregularity and disciplinary actions, as well as disqualification searches, should be considered essential checks. The geographical scope of the investigation should be adjusted based on the individual's living and work history to ensure comprehensiveness and accuracy. Such measures not only help protect consumer rights but also enhance public confidence in the industry and promote healthy economic development.