Regulator ordered American International Group Inc., Prudential Plc and 178 other insurers operating in Hong Kong to report sales of policies to mainland Chinese customers to uproot illegal selling.

Responding to this ruling, AIG the world’s biggest insurer has stopped sales of policies by its Hong Kong unit to mainland citizens altogether, upon firing agents suspected of selling policies across the border, said AIG’s spokeswoman in Hong Kong, Saw Choo Dickson. The regulator enables Hong Kong insurers to sell policies to mainlanders who travel to the city.

Hong Kong’s HK$123.1 billion ($15.8 billion) insurance market is about a third of that in China, where regulators limit foreign insurers’ business to protect local companies including China Life Insurance Co., the nation’s biggest insurer, according to Bloomberg. AIG is seeking to protect its business in mainland China, where it is the biggest foreign insurer.

AIG ``has been taking decisive measures to stop our agents soliciting business in China by terminating the contracts of any agent suspected of doing so,’’ emphasized AIG’s Dickson. ``In January we went a step further by deciding that we will no longer accept applications from mainland Chinese residents holding Chinese identity documents.’’

AIG issued four advertisements in the Guangzhou Daily and People’s Daily newspapers in China since August up to January, stating it is aiming at uprooting the illegal selling and that it dismissed all the agents involved.