Just read this article with interest.....

http://www.chinatechnews.com/2009/03/12 ... ffiliates/

Unsure if they're referring to the insurance being "fake" or "invalid".

unf. it doesnt say how he found out the ins. policies were fake.

if ctrip is really doing this, then i can not imagine what the other smaller ones doing

I find it unlikely CTrip would do this. I suspect what may really have happened is that the insurance policy was unsuitable for the traveller - i.e. something happened, the guy tried to make a claim. but realised he couldn't because of certain terms, which Ctrip may not have told him about. That kind of thing happens a lot.