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HKIA, ICAC target suspected unlicensed insurance sales to mainland China

The first joint operation led to the arrest of a broker and a referrer.

Hong Kong authorities have conducted their first operation targeting suspected unlicensed sales of insurance to mainland China customers.

The Insurance Authority (IA) and the Independent Commission Against Corruption (ICAC) executed the search warrants on 10 April and 11 April in four areas, including offices of a licensed insurance broker company and a referral company. This led to the arrest of a broker and a referrer.

Authorities believe those arrested also worked with other people to conduct the "unlicensed regulated activities in contravention of the Insurance Ordinance and also of suspected offences of agent using documents with intent to deceive his principal under the Prevention of Bribery Ordinance."

"Breaches of the Code of Conduct for Licensed Insurance Brokers are also suspected to have been committed,” IA added.

ALSO READ: HKIA suspends insurer for deceptive practice

The ongoing investigation will look into the broker company possibly tapping referrers to perform regulated activities on their behalf despite the latter having no licence to do so. 

“The broker company offered to pay inordinately high referral fees on successful sales, apparently incentivising its referrers to induce customers from Mainland China to buy long term insurance policies from authorised insurers in Hong Kong,” IA said.

There were also some cases wherein referrers were paid over 90% of the commission received by the broker.

Authorities also suspect that the broker and the referrer included false information in application forms, like the annual income and amount of assets held by Mainland customers.
 

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