Israel's Capital Markets Authority Considers Revoking Ex-Insurance Head's License

Israel's Capital Markets, Insurance and Savings Authority is considering revoking the insurance agent license of Shlomo Izik, the former president of the Insurance Agents Association. Izik was summoned to present his arguments to the supervisor, a preliminary step before a final decision is made. The authority's move is prompted by an indictment filed against Izik and his partners, Tzachi Azak and Shai Penso, in the "Yonet Credit" affair. In this case, former Finance Minister Moshe Kahlon was also involved in a minor offense.

Izik served as a controlling shareholder and director of the non-bank credit company, which collapsed in 2022 due to embezzlement from its northern branch. Prosecutors allege that Izik and others fraudulently transferred 2 million shares, valued at NIS 50 million, from the public company to a private one. This was allegedly done to repay bonds of the private company, by presenting false assurances to the public company's board. The authority noted that these actions purportedly involved loans to third parties and circular money transfers, concealing the true source of funding and obtaining company approvals through deceit. Izik is also accused of engaging in conflicts of interest, breaching trust, concealing personal interests, including misleading public reports and hiding significant financial risks, and even altering document dates.

The Capital Markets Authority stated that while these alleged actions were not committed in his capacity as president of the Insurance Agents Association, their severity, financial scope, systematic nature, and the alleged breach of trust raise serious doubts about his reliability, integrity, and suitability to hold an insurance agent license. The authority emphasized the high standards of reliability, integrity, and transparency expected from licensed professionals in a regulated financial market, especially those entrusted with the public's insurance and client interests. They also gave additional weight to Izik's public and professional standing at the time, which carries a responsibility to uphold professional and ethical standards, noting that a lack thereof exacerbates concerns about public trust in the insurance industry.

This action follows a previous NIS 163,000 fine imposed on Izik by the authority two years ago for transferring control of companies and agencies to his daughter, Bar Izik-Moyal, without prior approval. The authority dismissed his claims of a "technical error." Yonet Credit collapsed in 2022 with debts of approximately NIS 120 million. Kahlon, who joined as chairman in June 2021 after leaving politics, resigned about a year later when the affair came to light.

Izik's attorney, Eran Shaham Shavit, stated that the legal proceedings against his client have not yet begun and are unrelated to his work as an insurance agent, as the case involves his role in the public company Yonet Credit and was investigated by the Israel Securities Authority. He asserted that Izik never misused his license and was not suspected or accused of any offenses related to his activities as an agent or association president. Shavit also suggested that the authority's announcement and accompanying media campaign, especially given their timing, indicate a personal vendetta against Izik stemming from professional disputes between him and the authority's management during his tenure as president of the Insurance Agents Association. He added that a disciplinary tribunal of the association had previously dismissed related complaints against Izik.