Six censured for mis-selling investment products

This is the first time the Monetary Authority of Singapore has issued such orders against insurance agents for mis-selling breaches.
This is the first time the Monetary Authority of Singapore has issued such orders against insurance agents for mis-selling breaches.PHOTO: ST FILE

MAS issues prohibition orders against five insurance advisers, one relationship manager

Prohibition orders (POs) have been issued against five insurance advisers and one relationship manager for mis-selling insurance and investment products.

This is the first time the Monetary Authority of Singapore has issued such orders against insurance agents for mis-selling breaches.

Three advisers were from AIA, and two from Prudential. The relationship manager was from Citi Singapore. The 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, and one in 2009.

Some of the mis-selling involved "vulnerable" clients, defined as those over 62 and not proficient in spoken or written English or have below GCE O-or N-level qualifications.

The POs range from two to seven years. They bar individuals from providing any financial advisory service and from taking part in the management, serving as director or becoming a substantial shareholder of any financial advisory or capital market services firm.

The misconduct included forgery, making false or misleading statements to clients or the insurer, providing financial advice without due consideration for a client's financial situation and improper switching.

The misconduct by two former insurance agents - Mr David Hiah Xinkai of Prudential and Ms Heng Goid Hoon of AIA - involved mis-selling products to vulnerable clients, offences that carry stiffer penalties. The order served on Mr Hiah is for seven years, while that served on Ms Heng is for four years.

AIA said: "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... The affected customers have been remediated for any losses that they may have suffered."

The other insurance advisers censured - former AIA agents Koh Mei Ling and Jane Yeo Hui Rong, and former Prudential agent Nigel Chua Bingquan - received three-year POs.

Citi said relationship manager Zheng Xuemei was dismissed in 2016. She was given a two-year PO. It said: "We do not tolerate any misconduct that goes against the laws of the country and/or the policies of the bank."

Here is a look at the offences:

• David Hiah Xinkai: Seven-year PO; former Prudential agent. He forged the signature of several policyholders to effect fund switches without their knowledge or consent. He also intentionally provided false or misleading data to Prudential relating to clients' personal details while arranging insurance contracts. This resulted in clients losing policy rights while he earned commissions.

• Ms Heng Goid Hoon: Four-year PO; former AIA agent. She advised her client to switch investment-linked policies (ILPs) without disclosing switching costs, and made false declarations in the application forms to avoid AIA's scrutiny. She earned commissions by deliberately delaying the policy switch to circumvent industry rules that disallow commissions for early policy replacements.

• Ms Koh Mei Ling: Three-year PO; former AIA agent. She recommended an ILP without consideration of her client's financial condition, and artificially inflated her client's pay in the application. She earned commissions, and the client paid for a policy she could not afford.

• Ms Jane Yeo Hui Rong: Three-year PO; former AIA agent. She misrepresented to clients that their ILPs had guaranteed returns when she knew this to be false.

• Mr Nigel Chua Bingquan: Three-year PO; former Prudential agent. He made false or misleading statements to induce several clients to switch policies in a way detrimental to them. They incurred significant switching costs, including his commissions, for policies that did not meet their needs and risk profiles.

• Ms Zheng Xuemei: Two-year PO; former Citi relationship manager. She made a false statement to her client that his structured note was called back by the issuer when this was not so. The client was misled into executing an early redemption of the note.

A version of this article appeared in the print edition of The Straits Times on May 18, 2018, with the headline 'Six censured for mis-selling investment products'. Print Edition | Subscribe