Insurance agents sue AXA over 'bait'
Ten insurance agents who say they were tricked into joining a subsidiary of AXA with promises of joining fees and possible shares in the company are suing for HK$480 million.
The agents, including seven who had previously worked at AXA's competitor American International Assurance (Bermuda), filed the claim against Integrity Financial Advice Network, two members of Integrity's management team and the chief executive of its holding company, and AXA Chinese Region Insurance Company, at the High Court on Monday.
Among the seven former AIA staff are a former senior director, Lau Kong-kei. The other three plaintiffs had worked for Prudential Insurance and Massmutual Insurance.
AXA declined to comment because of the ongoing legal proceedings.
The claims relate to agreements for a business scheme which the agents say AXA and Integrity terminated in November and December last year.
The sum sought also includes commissions, bonuses and benefits that the agents claim they lost as a result of leaving their previous jobs and joining the business scheme.
The court filing says that around 2009, Denny Chan, chief executive of Integrity's holding company, and Kevin Lee and the head of network management, Chris Chan, along with members of AXA's management, worked out a business model which promised agents who joined the scheme the chance to own shares in it.
First, certain agents would form companies, become senior presidents and directors and get a share in Integrity. They would then recruit others, who might be given shares and would be able sell these when they left.
The filing says the agents were promised a fee for leaving their previous employers, but that AXA, Integrity and the managers 'never meant to pay a cent'. They claim that, although they were told Integrity would be independent, AXA in fact had a 51 per cent stake in it through a holding company.
The plaintiffs say the real objective 'was to get established and experienced AIA agents [and include other non-AIA agents along the way] to join AXA as AXA's agents and to sell AXA's products'. The model was used as 'bait' to deceive the agents, the plaintiffs say.
The filing says that after hearing of this plan, Lau agreed to it, formed a company and recruited others, including agents with years of experience. However, Integrity terminated their contract and those with the company's agents. Then, according to the filing, Denny Chan approached those agents and asked them to sign a contract directly with Integrity and AXA.
Integrity earlier sought to recover benefits it had paid Lau in a filing also at the High Court. Hearings in the case against Lau are scheduled for September 7 and December 5.
AXA, which has its headquarters in France, became the city's biggest insurer in March when it bought HSBC's general insurance business in Hong Kong, Singapore and Mexico for US$494 million.
The number of countries where AXA has a presence, with 163,000 employees and representatives and 101 million clients