Con­sumer Ed­u­ca­tion and Pro­tec­tion

IN­SUR­ANCE IS AN IN­TAN­GI­BLE ITEM WHICH IS MERELY A PROM­ISE OF COM­PEN­SA­TION FOR A SPE­CIFIC PO­TEN­TIAL FU­TURE LOSS IN EX­CHANGE FOR A PE­RIOD PAY­MENT I.E. THE PRE­MIUM. IN­SUR­ANCE IS DE­SIGNED TO PRO­TECT THE FI­NAN­CIAL WELL-BE­ING OF AN IN­DI­VID­UAL, A COM­PANY OR ANY

Insurance - - CONTENTS - Text Per­sat­uan In­surans Am Malaysia (PIAM)

In view of the cir­cum­stances un­der which this con­tract is for­mal­ized, it is im­por­tant for a con­sumer to be wellinformed of the ser­vice he will re­ceive and un­der what con­di­tions he will be el­i­gi­ble to re­ceive the com­pen­sa­tion. Whether the pub­lic re­alises it or not, in­sur­ance touches nearly ev­ery as­pect of their life. When some­one buys a car, they are re­quired by law to pur­chase mo­tor in­sur­ance. When some­one buys a house and ap­plies for a hous­ing loan, the bank will only ap­prove the loan when there is a valid fire in­sur­ance pol­icy. There are also other in­sur­ance poli­cies which are pur­chased daily by the pub­lic to cover var­i­ous risks such as per­sonal ac­ci­dent in­sur­ance, med­i­cal or health in­sur­ance, travel in­sur­ance and many more. The Per­sat­uan In­surans Am Malaysia (PIAM) has un­der­taken sev­eral mea­sures and con­tin­ues to in­tro­duce fur­ther mea­sures to ed­u­cate the con­sumer and pro­tect their in­ter­ests. PIAM has al­ways stressed in all its ed­u­ca­tional ef­forts that be­ing a wellinformed in­sur­ance con­sumer will en­sure that the con­sumer will be able to spend his ring­git wisely and be able to save money in the long run to pro­tect his in­ter­ests.

ED­U­CA­TIONAL TALKS

PIAM gives ed­u­ca­tional talks reg­u­larly to spe­cific groups of con­sumers on the class of in­sur­ance which they are in­ter­ested in. Talks have been de­liv­ered to small and medium en­ter­prises, prop­erty de­vel­op­ers and other in­ter­ested groups. PIAM lately par­tic­i­pated in two ed­u­ca­tional talks on Fire In­sur­ance. The first talk was on House­owner/House­holder in­sur­ance which was given at a

Prop­erty Expo or­ga­nized by prop­erty de­vel­op­ers and the sec­ond talk was on ed­u­cat­ing the con­sumer on Buy­ing The Right In­sur­ance Cover to Ef­fec­tively Pro­tect In­vest­ments which was given at a Prop­erty Launch fair. Par­tic­i­pants at these talks are given the ba­sics on the var­i­ous in­sur­ance poli­cies avail­able to them, the risks cov­ered un­der these poli­cies and how they should de­cide on which cover will be most suited for them.

ME­DIA ED­U­CA­TION AND RAP­PORT

In ad­di­tion to ed­u­cat­ing con­sumers through talks, pub­li­ca­tions and ar­ti­cles in the print me­dia, the As­so­ci­a­tion also has a close rap­port with the me­dia and ed­u­cates these stake­hold­ers which com­prise of se­nior me­dia rep­re­sen­ta­tives, jour­nal­ists and ed­i­tors of in­sur­ance re­lated mag­a­zines. In order to en­hance PIAM’s me­dia re­la­tions and also to pro­vide greater in­sights to jour­nal­ists on in­sur­ance mat­ters, the As­so­ci­a­tion hosts in­for­mal gath­er­ings with se­nior me­dia rep­re­sen­ta­tives and fo­cuses on open dis­cus­sions on cur­rent in­sur­ance re­lated mat­ters at these gath­er­ings. This gives an op­por­tu­nity to PIAM to state the in­dus­try’s case on cur­rent is­sues which are af­fect­ing the pub­lic or the econ­omy and en­ables the me­dia rep­re­sen­ta­tives to fully un­der­stand the in­dus­try’s stand on these is­sues. The As­so­ci­a­tion also or­ga­nizes me­dia work­shops which are more tech­ni­cal in na­ture and fo­cus on classes/topics of in­sur­ance which have been high­lighted fre­quently in the me­dia. The ob­jec­tive of these work­shop is to en­able the jour­nal­ists to have a clearer un­der­stand­ing of the class or topic of in­sur­ance, the salient points of the class of in­sur­ance and the roles of the in­sur­ers and pol­i­cy­hold­ers to se­cure the ap­pro­pri­ate pro­tec­tion and smooth pro­cess­ing of claims. PIAM is con­fi­dent that well-in­formed jour­nal­ists will re­port ac­cu­rately on in­sur­ance is­sues.

CON­SUMER ED­U­CA­TION PRO­GRAMME (CEP)

The As­so­ci­a­tion and its mem­bers also sub­scribe to the Con­sumer Ed­u­ca­tion Pro­gramme (CEP) which was ini­ti­ated by Bank Ne­gara Malaysia. This is a joint ef­fort be­tween BNM and the in­sur­ance and taka­ful in­dus­try for a long-term pro­gramme to pro­vide ed­u­ca­tion and in­for­ma­tion to en­able con­sumers to make well-in­formed de­ci­sions when pur­chas­ing in­sur­ance. The pro­gramme is called In­sur­ance Info and it aims to pro­vide and dis­sem­i­nate in­for­ma­tion on in­sur­ance prod­ucts and ser­vices, im­por­tant terms and con­di­tions as well as ex­clu­sions of in­sur­ance poli­cies, and the rights and re­spon­si­bil­i­ties of con­sumers, in a clear and sim­ple man­ner. In ad­di­tion, the pro­gramme also gives use­ful tips to con­sider when mak­ing de­ci­sions on which in­sur­ance will suit them best and also the re­dress mech­a­nisms avail­able in the in­dus­try. This in­for­ma­tion is chan­nelled through a se­ries of sim­ple lan­guage book­lets which are dis­trib­uted by in­sur­ance com­pa­nies and can also be ac­cessed on­line at www.in­sur­an­ce­info.com.my.

GUIDE­LINES ON PROD­UCT TRANS­PARENCY AND DIS­CLO­SURE

Recog­nis­ing the im­por­tance of ad­e­quate and ef­fec­tive dis­clo­sure to con­sumers in par­tic­u­lar, and fi­nan­cial ser­vice providers gen­er­ally, BNM had is­sued the Guide­lines on Prod­uct Trans­parency and Dis­clo­sure (Guide­lines). These Guide­lines serve to raise the dis­clo­sure stan­dards for fi­nan­cial prod­ucts and aim to sup­port

Whether the pub­lic re­alises it or not, in­sur­ance touches nearly ev­ery as­pect of their life.

in­formed de­ci­sion mak­ing by con­sumers through mean­ing­ful and timely dis­clo­sures. The Guide­lines pro­vide both gen­eral and prod­uct-spe­cific dis­clo­sure prin­ci­ples to be ob­served by in­sur­ance com­pa­nies. To en­sure dis­clo­sures are mean­ing­ful and fa­cil­i­tate de­ci­sion mak­ing, the Guide­lines re­quire in­sur­ance com­pa­nies to dis­close im­por­tant and rel­e­vant in­for­ma­tion, in­clud­ing key terms and con­di­tions in a timely, clear and con­cise man­ner. The Guide­lines also em­pha­sise the use of plain and in­tel­li­gi­ble lan­guage in the con­tracts, agree­ments and pol­icy doc­u­ments so that in­for­ma­tion can be com­mu­ni­cated in an easy and com­pre­hen­si­ble man­ner for cus­tomers to bet­ter un­der­stand their con­trac­tual rights and re­spon­si­bil­i­ties. The project on re­word­ing the pol­icy con­tracts, agree­ments and pol­icy doc­u­ments on gen­eral in­sur­ance into sim­ple plain lan­guage is un­der­taken by the As­so­ci­a­tion. The in­sur­ance classes cov­ered un­der this re­view process are Mo­tor, Fire (House­owner/House­holder) and Per­sonal Ac­ci­dent.

PRE-CON­TRACT DIS­CLO­SURE AND REP­RE­SEN­TA­TIONS

The Fi­nan­cial Ser­vices Act, 2013 came into force on 30 June 2013 with the ex­cep­tion of Sec­tion 129 and Sched­ule 9 of the Act which pre­scribes to pre-con­tract dis­clo­sure and rep­re­sen­ta­tions and pro­poses reme­dies for these mis­rep­re­sen­ta­tions. Un­der this new re­quire­ment which will come into ef­fect on 1st Jan­uary 2015, the duty of dis­clo­sure not only rests on the con­sumer but also on the in­surer. The in­surer is re­quired to ask all the rel­e­vant ques­tions be­fore a con­tract of in­sur­ance is for­mal­ized and fail­ure on the part of the in­surer to get any per­ti­nent in­for­ma­tion from the in­sured, for which the con­tract can be re­pu­di­ated, will in essence not re­sult in a re­pu­di­a­tion of the con­tract. This is be­cause the onus is now on the in­sur­ance com­pany to gather the rel­e­vant/per­ti­nent in­for­ma­tion from the in­sured be­fore a con­tract of in­sur­ance is fi­nal­ized. As the new re­quire­ments will en­tail changes to the pro­cesses of in­sur­ance com­pa­nies, PIAM is work­ing closely with in­sur­ance com­pa­nies to re­view the rel­e­vant pol­icy forms and doc­u­ments to en­sure ad­e­quate dis­clo­sures mea­sures are in place in these doc­u­ments so that there is no mis­rep­re­sen­ta­tions by any party.

IN­SUR­ANCE RE­DRESS MECH­A­NISM

In Malaysia there are Con­sumer Laws which pro­tect the pub­lic/in­sured and there are also re­dress mech­a­nisms in place where the con­sumer/in­sured can re­fer his griev­ances on in­sur­ance mat­ters for res­o­lu­tion. PIAM has its Com­plaints Ac­tion Bureau which as­sists in re­solv­ing con­sumer com­plaints from ei­ther the pol­i­cy­hold­ers or third par­ties against in­sur­ance com­pa­nies. Com­plaints can be chan­nelled to pi­am_sec@piam.org.my. The other re­dress body which is an in­de­pen­dent body set up to set­tle dis­putes be­tween the pub­lic and in­sur­ance com­pa­nies is the Fi­nan­cial Me­dia Bureau (FMB). The FMB pro­vides a free, fast, con­ve­nient and ef­fi­cient av­enue to re­fer dis­putes for res­o­lu­tions as an al­ter­na­tive to the Courts. De­ci­sions made by the FMB are bind­ing on all in­sur­ance com­pa­nies who are mem­bers of the FMB. For com­plaints, dis­putes or claims in­volv­ing fi­nan­cial loss, the amount claimed should not ex­ceed RM200,000 for Mo­tor and Fire in­sur­ance, RM100,000 for oth­ers and RM5,000 for Third Party Prop­erty Dam­age. Fur­ther de­tails on the FMB can be ob­tained by con­tact­ing them at en­quiry@fmb.org.my.

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