Proof of Thousands of ILAS Mis-Sales

To the Hong Kong Monetary Authority and other ILAS Regulators:

I am writing to you because I am looking for ways to help thousands of ILAS victims recover their money and also to ensure that other people don’t become ILAS victims in the future. I would like to get a public statement from all ILAS regulators regarding whether they agree with the Hong Kong Monetary Authority’s 22 April 2013 circular:

“AIs [Authorized Institutions] should not sell ILAS products to customers who do not need or want insurance or investment products…In general ILAS products are not suitable for customers who do not have a dual objective of investment and insurance (such as estate planning)…AIs should ensure that customers’ indication of any need or purpose relating to life insurance element of ILAS products is documented, and that compliance with this requirement is subject to proper monitoring.”

I would like to know if ILAS regulators, especially the HKMA, would regard an ILAS sale to be a mis-sale if the purchaser did not indicate an interest in “Life Protection” on their financial needs analysis forms but instead only indicated a desire for “Investment” or “Savings”. I personally know several ILAS victims who filled out their financial needs analysis forms as just described. Attached is an example. If HKMA would regard this to be evidence of a mis-sale, would HKMA view it as justification for enforcing refunds to victims and punishing mis-sellers? If the HKMA says yes, I want to know whether other ILAS regulators agree.

I would also like to get a public statement from all ILAS regulators on whether they agree with HKMA’s 14 March 2011 circular:

“When explaining or recommending ILAS products to customers, AIs [Authorized Institutions] should give balanced views. Where direct investment in the underlying investment assets (e.g. unit trusts and mutual funds) can be the alternative of indirect investment through ILAS products, AIs should explain to customers the pros and cons of ILAS products compared with direct investment in the underlying investment assets and taking out a life insurance policy separately.”

“AIs should make it clear to customer at the outset that the product is an investment-linked insurance product…Any description that disguises the insurance element, e.g. describing ILAS as “investment funds with complimentary insurance or life protection”, is inaccurate and unacceptable.”

“Where a customer indicates that he or she does not need/want insurance/investment products, AIs should not recommend ILAS products.”

If other ILAS regulators agree with HKMA, the only possible way to check and enforce compliance with these guidelines is by recording the sales process. Will other ILAS regulators admit that they should immediately start requiring the recording of the sales process?

Do other ILAS regulators agree with the following section of HKMA’s 14 March 2011 circular:

“3.1 Use of gifts

To avoid distracting customers’ attention from the nature and risks associated with ILAS products, AIs should not offer financial or other incentives (e.g. gifts) for promoting ILAS products.”

If other ILAS regulators agree, will they admit they should begin enforcing this rule immediately?

I personally know victims of AXA’s Swiss Privilege who were lured into unsuitable ILAS products by enticements of free super-luxurious exotic trips to places around the world (e.g., Africa, the Middle East, Eastern Europe). The only way to be invited to one of these trips was by buying an ILAS policy worth tens of thousands of US dollars.

I also know one Swiss Privilege victim who was originally introduced to Swiss Privilege by a referral from a friend, a friend who was possibly motivated to recruit due to the valuable referral rewards that s/he could receive. For example, by successfully convincing a single friend to buy a multi-thousand US dollar ILAS policy, a Swiss Privilege client is currently entitled to a free round-trip ticket to Bangkok or a choice among several luxury items. A full list of Swiss Privilege’s current referral rewards can be seen in their Referral Rewards Catalogue, which can be downloaded here.

I would like to know whether HKMA agrees that AXA Swiss Privilege’s sales tactics are likely conducive to mis-sales and should not be allowed. Does HKMA think that a thorough review by regulators of Swiss Privilege’s sales history is a reasonable proposition that is in the interest of potential victims? Do other ILAS regulators agree?

I am posting this letter at, and I am cc-ing it to several news organizations. I prefer that regulators address their responses to the media, not just to me.

Thanks for everyone’s time,

Lindell Lucy


A Financial Needs Analysis Form in Which No Interest in Life Protection Was Indicated

A Financial Needs Analysis Form in Which No Interest in Life Protection Was Indicated

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