Insurance agent charged by ICAC over $30m commission scam
The ICAC today (June 22) charged an insurance agent with conspiracy to defraud for allegedly recruiting a number of persons to join an insurance company as dummy agents and making false representations that they had handled over 200 insurance policies to deceive the insurer of commissions totalling about $30 million.
Lo Yin-wa, 30, insurance agent, faces one count of conspiracy to defraud, contrary to Common Law. She was released on ICAC bail, pending her appearance in the Eastern Magistrates’ Courts on Friday (June 24) for mention.
The charge alleges that between February 2016 and June 2020, the defendant conspired with a unit manager of Sun Life Hong Kong Limited (Sun Life HK) and six downline agents of the unit manager to defraud Sun Life HK by dishonestly falsely representing that the downline agents were the respective handling agents of 208 insurance policy applications; and causing Sun Life HK to approve those applications and to pay commissions, incentives, bonuses and allowances to the unit manager and downline agents.
ICAC investigation revealed that at the material time, the defendant was a branch manager of another insurance company. She recruited the above seven persons to join Sun Life HK and told them they were not required to source any clients.
During the above period, Sun Life HK received 208 insurance policy applications, mostly involving high commission rate insurance products, purportedly handled by the six downline agents. After approving those applications, Sun Life HK released commissions, incentives, bonuses and allowances totalling about $30 million to the six downline agents and the aforesaid unit manager.
The defendant had allegedly controlled the bank accounts of the six downline agents which were used to receive the above commissions, etc. and rewarded them with a monthly payment of a few thousand dollars each. The 208 insurance policies concerned eventually lapsed after subsequent premiums were not paid.
The ICAC investigation arose from a corruption complaint. The defendant was charged after seeking legal advice from the Department of Justice. As the relevant corruption investigation is continuing, the ICAC does not rule out further law enforcement actions.
Sun Life HK has rendered full assistance to the ICAC during its investigation into the case.
The ICAC calls on insurance practitioners to adhere to their pledge of integrity and urges them not to take part in any corrupt and illegal activities.
In order to assist the insurance industry in strengthening its corruption prevention capabilities in key operational areas such as verifying the commission of agents, the Corruption Prevention Department had collaborated with the industry to produce the “Corruption Prevention Guide for Insurance Companies”: cpas.icac.hk/EN/Info/Lib_List?cate_id=3&id=2568. The Community Relations Department will continue to collaborate with the industry for providing integrity training to insurance practitioners. Insurance companies and practitioners could also refer to the dedicated webpage tailor-made for the industry: hkbedc.icac.hk/insurance/en.