In September, the Independent Commission Against Corruption (ICAC) cracked a fraudulent scheme to obtain critical illness insurance claims and a criminal syndicate committing commission fraud. 26 people were arrested. The two cases involved a total of HK$77 million in fraudulent payments, and the related cases are still under investigation.
Prin Investigator Miranda CHEUNG Ka Po, said that in the critical illness insurance fraud case, the ICAC found that the insurance agent involved in the case assisted purchasing four high-claim critical illness insurance policies between 2017 and 2020. Later, the agent arranged through an intermediary a cancer patient who had similar physical appearances to the policyholder to undergo a medical examination, in order to obtain proof of cancer, and then fraudulently obtained a total of HK$26 million claims from the insurance company. The former insurance agent, the policyholder, the intermediary and the cancer patient were arrested during the operation.
The other case of commission fraud, in which the staff of the insurance company involved hired a number of eager job-seeking young people as "shadow downline brokers" who did not have to participate in selling, but the upline brokers misrepresented to the insurance company that the policies were sold by downline brokers in order to obtain commissions.
The ICAC said that in the first nine months of this year, a total of 32 complaints of corruption were received in the insurance industry. An average of more than 40 cases per year were reported to ICAC over the past five years, of which around 40% were about bribery and bribe-taking commission fraud, 20% about fraudulent insurance applications to obtain commissions, and 10% about fraudulent submission of false claims by the insured.
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