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MAS takes unprecedented action against 6 insurance agents for mis-selling of investment products

SINGAPORE — For the first time, the Monetary Authority of Singapore (MAS) has issued prohibition orders (PO) against insurance agents for the mis-selling of investment products.

The Monetary Authority of Singapore has issued prohibition orders (PO) against six individuals for the mis-selling of investment products.

The Monetary Authority of Singapore has issued prohibition orders (PO) against six individuals for the mis-selling of investment products.

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SINGAPORE — For the first time, the Monetary Authority of Singapore (MAS) has issued prohibition orders (PO) against insurance agents for the mis-selling of investment products.

In a press statement issued on Thursday (May 17), the central bank said it has barred five former insurance agents — from AIA Singapore and Prudential Assurance Co Singapore — and one relationship manager with Citibank Singapore from providing any financial advisory service, as well as from taking part in the management, acting as a director or becoming a substantial shareholder of any financial advisory firm, for between 2 and to 7 years.

The POs were issued following wide-ranging investigations, said the MAS. The six are Ms Heng Goid Hoon, Ms Koh Mei Ling, Ms Jane Yeo Hui Rong, all former representatives of AIA Singapore; two former representatives from Prudential Assurance Co Singapore, Mr David Hiah Xinkai and Mr Nigel Chua Bingquan; and Ms Zheng Xuemei, a former relationship manager with Citibank Singapore.

The individuals’ misconduct included forgery, improper switching of policies, and providing financial advice without due consideration of clients’ financial situation.

Their actions affected a total of 29 clients, and involved 48 policies — including investment-linked policies — and the sale of a structured note. It is understood that the clients had filed complaints with the financial institutions, which in turn alerted MAS.

An MAS spokesperson said that for most of the cases, the misconduct took place between 2013 and 2015.  For one case, the misconduct occurred in 2009 and 2014.

“In mis-selling cases, some time may elapse between the sale of the insurance policy and the date on which the customer submits a complaint to the insurer or relevant authorities,” the spokesperson noted.

Mr Hiah was issued with the longest PO for seven years, as his misconduct involved vulnerable clients. The former Prudential agent had forged the signatures of several policy holders to effect fund switches in their investment-linked policies without their knowledge or consent.

He also intentionally provided false or misleading information relating to his client’s personal details to his company when arranging insurance contracts, resulting in them losing their policy rights while Mr Hiah benefitted with the commissions made through the sales.

Ms Heng, who was issued with a PO for four years, had advised a vulnerable client to switch investment-linked policies without disclosing the switching costs to the client and made false declarations in the client’s policy forms to avoid scrutiny from AIA. The client incurred significant switching costs without any real benefit from the switch, while Ms Heng received commissions through the switch.

MAS defines “vulnerable clients” as individuals who meet two out of three of the following criteria: Aged 62 years or older, not proficient in written or spoken English, or with academic qualifications or the equivalent that are below O or N Levels.

The other financial advisors Ms Koh, Ms Yeo and Mr Chua were given three-year POs each.

Ms Zheng was issued with a PO for two years. She is also prohibited from performing any regulated activity under the Securities and Futures Act, and from taking part in the management, acting as a director, or becoming a substantial shareholder of any capital market services firm.

The POs took effect from April 30 for Ms Heng, Ms Koh and Ms Yeo, and from May 14 for Mr Hiah, Mr Chua and Ms Zheng.

The central bank’s moves follow the setting up of a department in 2016 to fight financial crimes, and strengthen enforcement. The department is responsible for enforcement actions arising from regulatory breaches of MAS’ banking, insurance and capital markets regulations.

“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,” said MAS assistant managing director for capital markets Lee Boon Ngiap.

He added: “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.”

Responding to media queries, AIA Singapore confirmed that the three former staff are no longer representatives of the company. The affected customers in those cases have been “remediated for any losses that they may have suffered”, the company said.

The firm said: “In the event that our customers’ interests are compromised as a result of misconduct by any of our representatives, AIA Singapore would ensure that appropriate actions are taken to remediate the affected customers.”

It reiterated its “zero-tolerance policy” against any fraudulent acts by any of its 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,” the firm said.

Prudential did not wish to comment, while a Citi spokesperson said Ms Zheng was dismissed in 2016 and the bank “(does) not tolerate any misconduct that goes against the laws of the country and/or the policies of the Bank”.

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