SHANGHAI police are investigating the city’s largest insurance agency for illegal fund-raising after its boss was reported to have fled abroad with 500 million yuan in public funds, the local insurance regulator said yesterday.

The Shanghai branch of the China Insurance Regulatory Commission said it discovered that Shanghai Fanxin Insurance Agency Co sold “self-made” fixed-income wealth management agreements to the public without authorization, and the Shanghai police are investigating the case.

An official with the regulator confirmed that Chen Yi, head of Fanxin, is unreachable but he declined to comment on the link between the investigation and Chen.

A whistle blower told Sina.com, China’s leading news portal, on Wednesday that Fanxin is suffering a credit stress, and Chen has escaped to Canada with 500 million yuan. A media contact of Fanxin disclosed that Chen has left the position for some time, but declined to comment on her whereabouts and how much money she has allegedly taken.

The agency is still operating and has six major partners including Sunshine Insurance Group, Taikang Life Insurance Co and Aegon-CNOOC Life Insurance Co.

Taikang Life Insurance Company is aware that Chen is on the run and it will cover any possible disputes with policy holders, said an official surnamed Shi. Taikang has sold 25 policies via Fanxin.

CIRC records showed Fanxin was fined 50,000 yuan in March after it  allowed its staff to mislead clients.

http://www.shanghaidaily.com/Business/finance/Insurers-illegal-fundraising-probed/shdaily.shtml