Group says its Hong Kong-based agents broke law by selling policies in China
American International Group (AIG) has withdrawn its application to sell group insurance in the mainland after acknowledging that its Hong Kong agents had illegally sold policies across the border.
In a filing with the United States Securities and Exchange Commission, the world's largest insurance firm said it had pulled its application in March pending the resolution of 'certain regulatory issues'.
'Among the regulatory issues to be addressed is the response to AIG's acknowledgment that certain of its Hong Kong-based agents sold life insurance to customers on the mainland in contravention of applicable regulations,' the filing said.
AIG also said that it had overstated its net profits over the past five years by US$3.9 billion.
In January, the South China Morning Post reported that American International Assurance (AIA), AIG's Hong Kong life insurance arm, had barred its employees from selling policies to mainland residents.
The mainland sales had reportedly constituted about 10 per cent of sales by its agents.
