(Yicai Global) June 18 -- Hundreds of Axa policyholders are demanding compensation from the insurer after one of its investment funds in Hong Kong flopped.

The plaintiffs, mostly from the Chinese mainland and Singapore, also issued an open letter on June 15 that said Axa's Evolution Hong Kong Investment Fund was running at a huge deficit and after management charges their losses had exceeded their initial investment. Some even demanded their insurance premium be refunded.

Paris-based Axa has denied playing a role in selling share in the fund or selecting the stocks it invests in several times, and claims to be cooperating with the Hong Kong police force's criminal investigation into alleged fraud at the fund.

The Evolution HKIF is a non-guaranteed connected life insurance product that lets policyholders choose where there cash is invested from a pool of over 1,000 asset types, according to Axa. It is mostly sold by independent insurance brokers and the loss came from an affiliate fund under the Worldwide Opportunities Fund, which is managed by Cayman Islands-registered CES Capital International, it said.

Clients bear all the risks when they invest in this type of insurance, veteran actuary Lou Daoyong told Yicai Global. The insurance firm is not liable, he added, saying the funds can charge a range of management fees based on performance.

But one market source who opted to remain anonymous disagrees. He said that by listing such a high-risk fund among its own asset library, Axa may have acted unlawfully and could be held responsible for its clients' losses.

Editors: Zhang Yushuo, James Boynton