Advisers Applaud Proposal to Ban 25 Year ILAS Policies

Last week, at a gathering of IFAs in the Middle East, the crowd erupted into applause after the CEO of “one of the largest advisory groups operating in the UAE” proposed banning 25-year regular premium investment-linked insurance policies. According to International Adviser:

“Explaining his position, Sardana said the reason these policies are currently being sold is not because they offer value to the client given “99% of the clients will not see through the 25 years”, but because of the “current remuneration”.”

In other words, the product was not suitable for 99% of people that it was sold to, yet advisers recommended the product anyway because it paid them the highest commission.

Last year, SCMP reported an estimate that 93% of ILAS policies in Hong Kong are surrendered before maturity. That estimate seemingly referred to ALL policies of any length (not just the longer 25 year policies). Using the same logic as Mr. Sardana, it would make sense to call for a total ban on all ILAS policies (or at least the current remuneration structure), since it is not suitable for nearly 19 out of 20 people that it is sold to in Hong Kong. Regulators’ refusal to stop this wholesale slaughter of consumers is reprehensible, and it stinks of corruption. I ask that anyone who has evidence of corruption please contact Hong Kong’s ICAC (Independent Commission Against Corruption).


Phone Number: 25 266 366

According to SCMP, LegCo member Kin-Poor Chan has already said the insurance industry is lucky that it hasn’t yet been investigated by the ICAC. I hope their luck is about to run out. I will have more to say about this later.

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