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SCMP Reporter

Three agents who cheated insurance companies out of millions in advance commissions  in an elaborate scam were jailed yesterday.

Deputy District Judge Anthony Kwok Kai-on sentenced Chan Chi-ming, 51, to three years,  Chan Ka-fai, 33,  to three years and six months and Li Cho-chuen, 34,  to four years.

Judge Kwok had earlier convicted the  defendants  on one count each of a conspiracy to defraud.

In a scam that the judge  condemned as having 'shaken the image of the insurance brokers' in Hong Kong, more than 2,000 people were induced to sign long-term insurance policies that they thought were free in the first year.

In reality, the three used some of their advance commissions of about $36.5 million they had collected from Standard Insurance (Asia), American International Insurance and New York Life, among other insurers, to make first-year payments for their clients.

The court heard an insurance brokerage company formed by the three defendants claimed to have signed 2,335 policies  from January 2003 to February 2004.

The insurance companies  launched an investigation after 86 per cent of policies defaulted within a year, whereas the industry default norm was slightly more than 10 per cent. The trio managed to pocket up to $4.6 million  from the advanced commissions.

'These are shameful acts - they ignored their  duty as professionals and thus shook the public's confidence in Hong Kong's insurance brokers. It is unfair to others who are professional and law-abiding,' Judge Kwok said. 'These offences are a severe breach of trust. Hong Kong is a highly business-oriented society in which the insurance industry has an influential role.'



Three agents jailed for insurance policy scam