Israeli Insurance Agency Fined 10.5 Million Shekels for Pension Fraud and Misleading Clients

The Israeli Capital Market Authority has imposed a civil fine and financial penalty totaling approximately 10.5 million shekels on Naaman Insurance Agency and its CEO, Naor Naaman, for violating pension regulation and advisory laws. The agency was found to have deceived clients and encouraged them to unlawfully withdraw pension savings, which compromised their insurance coverage and resulted in significant tax liabilities and high advisory fees.

The investigation began following complaints and involved the Authority's intelligence and enforcement teams. Findings revealed a pattern where agency representatives advised clients to prematurely withdraw pension funds without holding the required pension advisory license. In some cases, clients were misled to believe they were communicating with representatives of the institutional bodies managing their pension funds. Additionally, agency staff accessed clients' personal accounts on institutional websites without their knowledge.

The Authority also discovered flawed justification documents sent to clients after consultations, including signatures from licensed advisors who had not actually provided advice. After the audit, the agency was notified of the intended fine and given a chance to respond, but all their arguments were rejected. Besides the pension-related violations, the Authority is currently conducting a parallel review of the agency's insurance operations.