Crooked Hong Kong insurance agents claim extra commissions off junior staff

Corruption complaints against the insurance industry have almost doubled in three years, with senior agents in the industry implicated for a new tactic in which they falsely claim commissions from subordinates.

According to the Independent Commission Against Corruption (ICAC), the number of complaints against insurance companies rose from 19 in 2013 to 35 last year. There were 21 cases in 2014 and 24 in 2015.

Tommy Lui Kar-chung, chief investigator in the ICAC’s operations department, said the manager and supervisor of a team (the up-line agent) would receive an overriding commission if their down-line agents procured an insurance policy.

He said when the senior made a deal with a client, the senior secretly named the junior as the purchasing agent on the policy forms to deceive more commissions from the company.

“Many proposed insurers were not aware that the buyer’s name on the documents they signed was not the agent they knew. They trusted the agent too much and sometimes even signed on blank pages,” said Lui, adding that the tactic was new to the graft-buster.

“The down-line, who made no effort at all, can also receive commissions. On top of the overridding commissions, the supervisor asked the junior for a rebate out of his or her pocket to earn extra.”

Lui said it sounded a good deal to the down-line agents, usually newcomers who needed to hit monthly sales targets to secure their jobs. Some did not realise they were being used until they received commissions from deals they knew nothing about.