ComplianceOne Insurance Newsletter – November 2025
The topics discussed in this monthly newsletter are as follows:
REGULATORY UPDATES
ENFORCEMENT NEWS
IA Imposes Restrictive License Conditions on Mighty Divine Insurance Brokers Limited Associated with Prince Group (太子集團)
ICAC Issues Arrest Warrants for Two Individuals Implicated in $3 Million Insurance Commissions Fraud
Regulatory News
1. IA Issues Circular on Reference Checking Schemes for Licensed Insurance Intermediaries
On 20 November 2025, IA Issues further Circular on the Reference Checking Scheme (the “Scheme”) for Licensed Insurance Intermediaries.
Addressing the “rolling bad apples” phenomenon
“One bad apple spoils the whole barrel” so the old adage goes. In the context of the Scheme, the phenomenon of “rolling bad apples” refer to licensed individuals attempt to evade the consequences of past misconduct by moving principals without proper disclosure.
To address the issue of “rolling bad apples”, the Scheme was launched by the Hong Kong Federation of Insurers (“HKFI”) by its circular dated 5 July 2025 to be used by its members which are authorized insurers carrying on long-term business from 1 September 2024 onwards. The IA then issued the Circular on 5 July 2024 to endorse and support the Scheme.
The Scheme then expanded in Phase 2, jointly launched by the HKFI, the Hong Kong Confederation of Insurance Brokers (“CIB”) and Professional Insurance Brokers Association (“PIBA”), covers all licensed long-term individual intermediaries to protect policyholders, maintain market confidence, and prevent misconduct from spreading.
Effective Date
With effect from 1 January 2026, the Scheme will be expanded to cover all appointment of all individuals licensed intermediaries carrying on long term insurance business. Non-compliance may lead to supervisory scrutiny or disciplinary action by the IA.
Scope and Application
Applies to appointments of prospective intermediaries (the “Candidates”), including:
licensed individual insurance agents;
technical representatives (agent); or technical representatives (broker) (collective as “TRs”);
for regulated activities in long-term business.
As a Recruiting Principal, conduct reference checks on candidates with past 7 years of relevant experience. Check only the THREE most recent appointments if multiple. Excludes agencies that are authorized institutions under Banking Ordinance (potential integration with banking scheme ongoing).
Summary of the Scheme
Making a Reference Checking Request
(as Recruiting Principal) | Before appointing for long term activities, conduct reference checks on THREE most recent appointments within Past 7 years. · Use Annex 1A template to request info from responding principals. · Obtain written consent from candidates via Annex 2A form, authorizing checks, disclosure, and exempting contractual limits.
If candidates refuse to provide consent or withdrawn the provided consent, should NOT appoint.
For group companies, one entity can conduct checks for reliance, but each remains accountable with access to results. |
Responding to a Reference Checking Request
(as Responding Principal) | Upon received the Reference Checking Request from Recruiting Principal: · Complete and return info within 15 days; · If delayed, send interim reply with reason and expected final (max 2 months, exceptional only, approved by *KPIM/RO or delegate). *KPIM - key person in control function for intermediary management; RO - Responsible Officer.
After submitting the first round of reference checking requests, respond to any further clarification requests within 15 days, if applicable. Recruiting Principal may assume that no further clarification to be provided by Responding Principal. |
Assessment by the Recruiting Principal
(as Recruiting Principal) | Discretion in Decisions: Recruiting principal has full discretion to appoint based on all info, including references. Evaluate adverse info considering nature, timing, explanations, and recurrence risk. Responding principals may voluntarily add material facts.
Opportunity to Be Heard: For fairness, provide candidates chance for representations if adverse info may block appointment; share reference copy. No need to reopen investigations or seek more from responders.
Proceeding with Adverse Records: Document assessment and justification for appointing despite issues; endorsed by KPIM/RO.
Ongoing Assessment: If Responding Principal declare further information to provide, the reference process may consider complete once the Recruiting Principal assesses available information and decides on appointment (must document the justification with KPIM/RO endorsement). |
Pre-Appointment & Post-Appointment
(as Recruiting Principal) | Pre-Appointment If the Recruiting Principal decides to appoint despite adverse records from reference checks, they must document the assessment and justification, which requires endorsement by KPIM/RO.
Post-Appointment If additional information arrives after appointment, the Recruiting Principal has full discretion to use it for ongoing evaluation, including potential actions like terminate the appointed candidate. |
Records and Communications
(All Principals engaging Long-term business) | Record Keeping For Insurance Broker Company engaging Long-Term Business: · Maintain records of resigned TRs for at least 7 years (or per internal policy, not longer than necessary under PDPO). · For unsuccessful application, retain max 2 years unless reason or consent.
IIC Centralized Contact Database IA will maintain centralized contact database contain all participating principals via IA’s e-portal - Insurance Intermediaries Connect (“IIC”).
As a safeguard, responding principals are not required to reply to reference check requests unless sent from the valid designated email address recorded in the contact database. |
Reference Checking Schemes Materials
The Circular attached with relevant materials including:
I. Main Paper – Details of the Schemes and Procedures
II. Annex 1A – Template
III. Annex 2A – Consent Form
IV. FAQ for Licensed Entities
V. FAQ for Licensed Individuals
Attachment: Reference Checking Schemes Materials
附件: 保險中介人背景查核計劃資料
SIGNIFICANCE:
This Scheme reinforces the IA's commitment to maintaining high standards of conduct and integrity in Hong Kong's insurance sector by preventing the recirculation of unfit intermediaries. By mandating structured reference checks, it enhances policyholder protection, reduces risks of misconduct, and promotes a more transparent and accountable industry.
Insurers and intermediaries should review their hiring processes promptly to ensure compliance, as this could mitigate potential regulatory risks and foster greater trust in the market.
Enforcement News
2. IA Imposes Restrictive License Conditions on Mighty Divine Insurance Brokers Limited Associated with Prince Group (太子集團)
The Prince Group (太子集團) founded by Chen Zhi (陳志), has been implicated in operating telecom fraud parks in Cambodia, with Chen Zhi facing US prosecution and sanctions, including the freezing of approximately HK$120 billion in Bitcoin assets.
On 28 October 2025, IA Imposes Restrictive License Conditions on Mighty Divine Insurance Brokers Limited (“Mighty Divine”) - Associate Company with Prince Group. The conditions prohibit the company from conducting, or representing itself as conducting, any regulated activities as defined under the Insurance Ordinance (Cap. 41).
Details of the Licensed Corporate:
Name (EN) | Mighty Divine Insurance Brokers Limited |
Name (CN) | 美迪保險經紀有限公司 |
Licence No. | FB1329 |
License Type | Insurance Broker Company |
Line(s) of Business | General & Long Term Business (excluding Linked Long Term Business) |
Business Address | FLAT/RM 803, 8/F, 68 KIMBERLEY ROAD, TSIM SHA TSUI, KL |
Responsible Officer(s) | Nill (as of 28 Oct 2025) |
For more details, please refer to Register of Licensed Insurance Intermediaries
Conditions of the License |
1) The licensee is restricted from carrying on, or holding out to carry on, any regulated activities under the Insurance Ordinance (Cap. 41) (“IO”);
2) Without prejudice to the generality of condition (1) above, and subject to condition (3) below, the licensee shall not receive, hold, or deal with any monies as specified in section 71(2) of the IO (i.e. (a) monies received by the company from or on behalf of a policy holder or potential policy holder for or on account of an insurer in connection with a contract of insurance; and (b) monies received by the company from or on behalf of an insurer for or on account of a policy holder or potential policy holder.) (“Client Monies”); and
3) The licensee may be involved in arranging the transfer, remittance or payment of, or otherwise deal with, Client Monies in accordance with the requirements under the IO and the Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules (Cap. 41L), provided that (i) it acts in compliance with all applicable laws and regulatory requirements; and (ii) it has obtained the prior written consent of the Insurance Authority. |
3. ICAC Secures Jail Sentences for Last Batch of Defendants in $52 Million Dummy Agents Commissions Fraud
On 21 November 2025, the Hong Kong District Court sentenced the final six defendants in a major corruption case investigated by the Independent Commission Against Corruption (“ICAC”), involving a $52 million fraud scheme (the ”Scheme”) orchestrated through dummy insurance agents at:
FWD Life Insurance Company (Bermuda) Limited (富衛人壽保險(百慕達)有限公司) (“FWD”); and
Sun Life Hong Kong Limited (香港永明金融有限公司) (“Sun Life”).
Case Summary
The scheme, masterminded by LO Yin-wa (“LO”), a former FWD branch manager who was earlier sentenced to 46 months' imprisonment, involved recruiting dummy agents who falsely represented themselves as handlers of 478 high-commission insurance policies between February 2016 and November 2020. This deception led to the release of over $52 million in commissions, incentives, bonuses, and allowances, most of which were funneled back to LO through laundered bank accounts. The majority of the policies lapsed due to non-payment of subsequent premiums.
FWD and Sun Life provided full cooperation during the ICAC investigation, which stemmed from a corruption complaint.
Enforcement Act and Court Order
The last six defendants, aged 25 to 39 and acting as purported insurance agents were convicted or pleaded guilty to charges of conspiracy to defraud and conspiracy to deal with property known or believed to represent proceeds of an indictable offense, with sentences ranged from 12 to 21 months' imprisonment.
i. LEUNG Tsz-wing (梁紫穎) ii. MO Wing-han (毛詠嫻) iii. WOO Kin-leung (胡健良) | Entered Guilty Pleas |
iv. LO Nga-wing (羅雅穎) v. NGAN Tsz-ting (顏梓定) vi. KONG Tsz-ying (江梓瑩) | Convicted After Trial |
A total of 17 defendants faced 20 charges in the case, with 10 other dummy agents previously sentenced to terms ranging from 11 to 22 months.
SIGNIFICANCE:
The ICAC continues to prioritize integrity in the insurance sector, offering training and resources like the Corruption Prevention Guide for Insurance Companies to mitigate such risks. The judge also reprimanded the defendants for breaching professional conduct standards, noting they were lured into the offenses by the main culprit.
This case highlights the severe consequences of integrity breaches in the insurance industry, emphasizing the need for robust internal controls, agent verification processes, and anti-fraud measures to prevent dummy agent schemes that erode public trust and cause financial harm.
4. ICAC Issues Arrest Warrants for Two Individuals Implicated in $3 Million Insurance Commissions Fraud
The ICAC has issued arrest warrants for NG Ho-lun (吳浩麟) (“NG”) and Kuzca CHIK Sin-deon, formerly known as Pan CHIK Ka-tung (戚善惇, 前稱戚加彤) (“CHIK”), two key figures in an alleged insurance fraud scheme that defrauded:
Sun Life Hong Kong Limited (香港永明金融有限公司) (“Sun Life”); and
China Taiping Life Insurance (Hong Kong) Company Limited (中國太平人壽保險(香港)有限公司) (“Taiping Life”);
of approximately $3 million in commissions, bonuses, and allowances through bogus policies and false representations.
Case Summary
The case, which involves recruiting family members, friends, and police officers as dummy agents and policyholders, stems from corruption allegations and has led to charges against eight individuals total, with six already charged and appearing in court.
On 6 November 2025, the case against the six charged defendants were transferred from the Eastern Magistrates’ Courts to the District Court for plea on 27 November 2025. The defendants face 21 charges. See below table for the Six Charged Defendants Details:
Role/Relationship | Name |
Police Sergeant | LAM Hin-ho (林顯豪) |
LAM Hin-ho’s brother | LAM Chun-pong (林振邦) |
LAM Hin-ho’s sister-in-law | YU Xiaodan (余曉丹) |
LAM Hin-ho’s friend | LAU Chun-yee, formerly known as LAU Man-yee (劉臻頤, 前稱劉敏儀) |
Solicitor | Osbert HUI Yee (許懿) |
Police Constable | SZE Hong-chak (施匡澤) |
For more details of the case, please refer to Topic 4 of ComplianceOne Insurance Newsletter – October 2025
Details of Two Wanted Individuals
Name | Former Positions | Role in Fraud | Fraud Conducted |
Regional Director of Sun Life;
Senior Branch Manager of Taiping Life | Central role in orchestrating the fraud | Recruited individuals (including LAM Hin-ho’s family, friends, and police colleagues) as dummy downline agents and policyholders;
Took out 20 insurance policies, paying premiums while falsely claiming they were settled by genuine policyholders;
Ensured false claims of agent interviews;
Conspired with LAM Hin-ho and LAU Chun-yee to create false academic qualifications for LAU's recruitment. | |
Insurance Agent of Sun Life
| Participated in recruitment and posed as a dummy agent
| Contributed to false representations to insurers;
Deceived insurers into believing applications were legitimate and interviews occurred, leading to fraudulent commissions. |
SIGNIFICANCE:
This case underscores the vulnerabilities in the insurance sector to internal fraud schemes involving unlicensed or dummy intermediaries, particularly when intertwined with public servants like police officers, potentially eroding public trust in both law enforcement and financial institutions.
The ICAC's proactive investigation and pursuit of fugitives highlight the importance of robust verification processes for policy applications, agent qualifications, and commission payouts to prevent such exploitation. Insurers are urged to enhance anti-fraud measures, including cross-verification of applicant interviews and premium sources, while collaborating with regulators to maintain industry integrity and protect policyholders from systemic risks.
[End of ComplianceOne Insurance Newsletter – November2025]
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