The Hong Kong Insurance Authority (IA) has imposed a 50-month ban on insurance intermediary So Yuen Wa (Licence number: IG3140) after determining that she engaged in misleading conduct related to policy replacements.
The IA’s investigation found that So advised two clients to surrender their existing critical illness and long-term savings policies, based on the claim that her appointing insurer would acquire those policies.
Acting on this advice, the clients surrendered three existing policies and purchased eight new ones through So.
The IA reported that So failed to disclose that these transactions amounted to policy replacements, impersonated a client to obtain policy information, and retained the surrender value rather than applying it to the new policies.
While most of the funds were eventually returned by So, the IA noted that the clients lost access to the benefits of their original policies and could not reinstate them.
“Policy replacement is a serious decision that carries far-reaching implications on the interest of policy holders,” it said.
The regulator urged the public to exercise caution when asked to surrender insurance policies and reminded intermediaries that deceptive or unethical conduct in policy replacement cases will result in significant penalties.
Further details can be found in the “Enforcement News” section and the Register of Licensed Insurance Intermediaries on the IA’s website.
In a separate enforcement action, the IA announced that Yan Zhiyu was fined HK$10,000 by the Eastern Magistrates’ Courts for failing to attend an interview as part of an ongoing investigation into suspected misappropriation of premium payments from two policyholders.
According to the IA, Yan’s absence was a breach of section 64ZZL(1) of the Insurance Ordinance (Cap. 41), which requires individuals to cooperate with regulatory investigations.
The IA clarified that individuals may be required to assist with investigations or attend interviews to support the authority’s oversight responsibilities.
Failure to comply with such requirements can result in fines of up to HK$200,000 and imprisonment for up to one year upon conviction on indictment. For summary convictions, the maximum penalty is a HK$50,000 fine and six months’ imprisonment.
The IA also disclosed disciplinary measures against Tahoe Life Insurance Company Limited, following findings of unauthorized related-party transactions between July 2019 and April 2020.
Tahoe Life was fined HK$10 million, payable from its shareholders’ fund, and received a public reprimand.
The IA’s review determined that Tahoe Life engaged in transactions with Tahoe Group Global (Co.) Limited without securing prior regulatory approval, as required by local insurance regulations.
During the period under review, Huang Qisen and Ge Yong were directors of Tahoe Life. Both individuals have since left their positions and are no longer deemed suitable for key management roles, according to the IA.
To address the compliance shortcomings, the IA has implemented supervisory measures, including asset ring-fencing, enhanced internal controls, and investment restrictions.
On July 26, 2024, the IA appointed joint and several managers to oversee Tahoe Life’s operations, business, and property.
The IA stated that these actions are intended to protect the interests of policyholders, and confirmed that existing policyholders will not be affected by the enforcement steps.
