Reply to the Securities and Futures Commission

Dear Mr Lucy,

We note that you have copied the Securities and Futures Commission (SFC) in your email to the Hong Kong Federation of Insurers on 28 May 2013.

We understand that you have brought the matter to the attention of the Office of the Commissioner of Insurance, the frontline regulator of insurance companies. Therefore, we will leave the matter for OCI to handle. 


Karen Ha
External Relations, Corporate Affairs
Securities and Futures Commission
35th Floor, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
Tel: (852) 2231 1222 | Fax: (852) 2524 3718


To Karen Ha (and everyone else at SFC):

When you say you will “leave the matter for OCI to handle,” I hope you mean the specific complaint concerning Ms. Leung. But if you are including my general complaint about SFC regulations on illustration document requirements, then shame on all of you at SFC. You CANNOT just leave that to OCI. It’s your responsibility. You are responsible for allowing the insurance companies to pack their documentation with half-truths and smoke and mirrors for years.

The vague statement, “You may suffer a significant loss,” is just a fig leaf. ILAS is such a horrible investment that it would be scandalous if you didn’t force the insurance companies to give some kind of warning. However, if you required them to be clear and specific about its true costs, ILAS sales would plummet. I suspect you know this, but you are somehow directly or indirectly in the pockets of the insurance companies, which is why you don’t force them to be honest. I would like to know: Who do you think you work for? And who are you trying to protect? The predators or the prey?

I suggest you talk to some people in the mutual fund industry. I did, and I was told that ILAS was a good investment only for foreign tax evaders. If that’s right, then ILAS exists only for unethical purposes: to scam uneducated investors and to cheat foreign governments. In a moral society, this product shouldn’t even exist. So why aren’t you forcing the insurance companies to make the nature of this product clear? It is within your power to do so, but you have not done it.

I’m sure you have dozens of bad excuses for your inaction, and, by your logic, ultimately nobody is responsible. You’ll say OCI needs to handle it. OCI will say PIBA needs to handle it. PIBA will say the broker needs to handle it. And the broker will handle it by referring to the policyholder’s signature, a signature supposedly confirming an understanding of something impossible for the policyholder to understand, a signature which really just meant that the policyholder trusted the broker and the insurance company not to screw him, which they did.

Who is to blame? Is it the thousands and thousands of policyholders who signed? I guess you can blame them for being gullible, trusting, and stupid. But you can’t blame them for being evil. The title of evil goes to the insurance companies and the insurance brokers who create, promote, and sell this toxic shit. It also goes to the regulators who make it possible.

Lindell Lucy

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