Recent collapse of firm prompts officials and the industry to review regulations Government and insurance industry bodies are working on how to tighten controls on insurance brokers after the collapse of a firm whose boss went missing with $6 million in customers' premium payments. Insurance broker Shanghai Insurance Advisers Company shut after Chan Po-man went missing last Thursday. Professional Insurance Brokers Association chairman Sammy Lui yesterday said it had received calls from more than 600 clients who had lost money. The firm's client list ran to 1,500, but it is not known exactly how many were affected. At present, an insurance brokerage needs only minimum capital of $100,000 - far below the potential losses in a case such as that of Shanghai Insurance Advisers. 'The incident has shown there is a need for us to do more to prevent some insurance brokers from failing. We will carry out more audit checks on the financial health of brokerage firms,' said Mr Lui. 'It is a fact that many insurance brokers are finding it hard to operate in a competitive market like Hong Kong. However, there is no excuse for any broker to escape with clients' money.' Mr Lui said the association was working with 10 insurance companies to offer discounts for customers affected by the collapse of the brokerage. The police yesterday received three more complaints about the collapsed brokerage, bringing the total to six. An Insurance Authority spokesman said the government would review the case to plug any regulatory loopholes. 'The government will definitely work with industry bodies to review the regulatory system on insurance brokers and to look for areas of improvement.' Shanghai Insurance Advisers mainly sold motor insurance and domestic helpers' workplace insurance. Customers said they had paid money to Mr Chan's firm but his cheques paid to the insurance companies were rejected. The company is one of 500 insurance brokers in Hong Kong acting as middlemen who buy insurance policies for customers from several insurance companies. The brokers, who earn a commission from the insurance companies, offer additional services and discount prices for clients after arranging large sales with the firms. Bernard Charnwut Chan, the legislator representing the insurance sector, said present rules already had requirements regulating brokers. 'I don't think it is a problem of the current regulatory system as no regulator can prevent crime if someone intends to conduct any malpractice,' he said. Chan Wing-kai, the Consumer Council's head of complaint and advice division, said the customers should learn from this experience and not make cheques payable to their brokers, but to the insurance companies.