The Monetary Authority of Singapore (MAS) has issued prohibition orders (PO) against six individuals - five insurance advisers and one relationship manager - for mis-selling of insurance and investment products.
This is the first time such POs have been issued against insurance agents for mis-selling breaches. Three advisers were from AIA, and two from Prudential. The relationship manager was from Citi Singapore.
Their offences involved 29 clients, 48 insurance policies and one structured note. Most of the offences are understood to have taken place between 2013 and 2015; only one went as far back as 2009.
Some of the mis-selling involved "vulnerable" clients, defined as those age 62 and up, not proficient in spoken or written English, or have less than GCE "O" level or "N" level qualifications.
Other instances of misconduct involved forgery, making false or misleading statements to clients or to the insurer, providing financial advice without due consideration for clients' financial situation, and improper switching.
Lee Boon Ngiap, MAS assistant managing director for capital markets, said representatives of financial institutions who give advice on financial products have a duty of care to their customers. "MAS will take stern action against representatives who betray the trust placed in them and provide false or misleading information or give irresponsible advice to their customers.
"And MAS will publicise these actions to send a clear message that such misconduct will not be tolerated and that, where warranted, we will not hesitate to weed out errant representatives from the industry."
David Hiah Xinkai and Heng Goid Hoon mis-sold products to vulnerable clients, an infraction which made them liable for stiffer action; the POs served them are thus longer - seven years for Hiah, formerly of Prudential and four for Heng, who used to be with AIA.
AIA said: "We strictly adhere to a zero-tolerance policy against fraudulent acts by any of our representatives. AIA Singapore expects all representatives to adhere to the highest ethical standards, and representatives who are found to have committed fraudulent acts and/or misconduct shall be appropriately dealt with."
For clients whose interests are compromised by an agent's misconduct, "AIA Singapore would ensure that appropriate actions are taken to remediate the affected customers".
The losses suffered by the customers of the three AIA representatives have been redressed.
Citi said the relationship manager was fired in 2016. "We do not tolerate misconduct that goes against the laws of the country and/or the policies of the bank."
These are highlights of the offences:
- David Hiah Xinkai: He forged the signature of several policyholders to effect fund switches without their knowledge or consent. He also intentionally provided false or misleading information to Prudential relating to clients' personal details while arranging insurance contracts. This resulted in clients losing their policy rights while he earned commissions from the sale.
- Heng Goid Hoon: She advised her client to switch investment-linked policies (ILPs) without disclosing the switching costs, and made false declarations in the policy application forms to avoid scrutiny from AIA. She earned commissions by deliberately delaying the policy switch to circumvent industry rules that disallow commissions for early policy replacements.
- Koh Mei Ling: This former AIA agent was given a three-year PO for having recommended an ILP without considering her client's financial condition.
She also artificially inflated her client's annual income in the policy application. She earned commissions from the sale, and the client purchased a policy she could not afford. - Jane Yeo Hui Rong: This former AIA agent was given a three-year PO for having misrepresented to clients that their ILPs had guaranteed returns when she knew this to have been false.
- Nigel Chua Bingquan: This former Prudential agent was given a three-year PO for making false or misleading statements that induced several clients to switch their policies in a manner detrimental to them. The clients incurred significant switching costs, including Mr Chua's commissions, for policies that did not meet their needs and risk profiles.
- Zheng Xuemei: This former Citi relationship manager was handed a two-year PO for falsely telling her client that his structured note was called back by the issuer. The client was misled into executing an early redemption of the note.
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