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August 20, 2013

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Insurance boss said to have fled with 500m yuan captured in Fiji

The head of Shanghai’s largest insurance agency has been caught in Fiji and was escorted home by police yesterday.

She was said to have fled China with 500 million yuan (US$81.6 million) from the company.

Chen Yi, controller of Shanghai Fanxin Insurance Agency Co, was arrested in a joint operation between Chinese and Fijian police.

The arrest came four days after the China Insurance Regulatory Commission said it had found Fanxin raising funds illegally by selling “self-made,” fixed-income wealth management agreements without authorization.

Shanghai police began investigating the case after a whistleblower told news portal that Fanxin was having financial problems and that Chen had escaped to Canada with 500 million yuan.

A source at Fanxin disclosed that Chen had left her position for some time, but declined to comment on how much money was allegedly taken.

Records at the Shanghai Industrial and Commercial Administrative Bureau show that Chen had invested 2.7 million yuan in Fanxin, and she held a 90 percent stake in the company.

In March, the company had changed its legal representative from Chen to a woman named Su.

The agency is still operating and has six major partners — Sunshine Insurance Group, Kunlun Health Insurance Co, Taikang Life Insurance Co, Sun Life Everbright Life, Happy Life Insurance Co and Aegon-CNOOC Life Insurance Co — according to Fanxin’s website.

A National Business Daily reporter said the agency was still selling wealth management products along with insurance policies after Chen had left.

Fanxin agents said it was common practice to offer additional rewards to attract customers.

A customer surnamed Zhang told the newspaper that he only wanted to buy wealth management products and wasn’t aware that he was buying insurance policies.

Taikang and Kunlun both said they had not authorized Fanxin to sell wealth management products, and would take care of any possible disputes concerning insurance policies.

The CIRC’s records show that Fanxin was fined 50,000 yuan in March after it allowed its staff to mislead clients.

The fine was part of a campaign the regulator launched in 2012 against insurance agencies in a bid to clean up a market plagued with misleading sales tactics.

Last year, the regulator fined insurance agencies a total 1.02 million yuan for violating sales regulations. It said China’s insurance agencies sold a combined 921.7 billion yuan in premiums in 2012, or 93 percent of China’s total life insurance premiums.



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