a. Registered Financial Planner (RFP)
The RFP is the first Malaysian-based financial planning qualification jointly developed by LIAM, MII and NAMLIFA to equip agents with financial planning knowledge, skills and competency to cope with consumer demand as well as competition among other financial services providers such as banks and unit trust companies. LIAM, MII and NAMLIFA founded the Malaysian Financial Planning Council (MFPC) in May 2003 to oversee the development of RFP programme. Upon successful completion of the programme and having fulfilled the requirement set by MFPC, the candidates would be conferred the RFP designation that would allow them to practice as accredited financial planners.
Effective 1 January 2005, agents are required to attend module 1 and module 2 of the RFP, a part of the training under the Continuous Professional Development (CPD). i) consumer-related issues and implications are incorporated within the product development and authorization stages; ii) adequate and effective measures for resolving and monitoring customer complaints are established; b. Treat Customers Fairly The Treat Customers Fairly (TCF) framework was finalized and introduced by LIAM in January 2012.
“With the rising influence and usage of mobile phones and the internet, there is a need to explore possibilities of adding these to a company’s multi-channel distribution for insurance.
iii) customers are fully informed through welcome calls, product disclosure sheet and the Customer Fact-Find process; The TCF standards is part of the requirement stipulated in the guidelines on Introduction of New Products for Insurance Companies issued by BNM and enforced on 1 July 2009. iv) products are sold based on customer’s suitability and risk appetite; v) agents and staff are well qualified and properly trained; To ensure that there is harmonization of practices within the industry, LIAM has formulated the minimum standards for the TCF framework as follows: vi) the commission structure is not excessively biased towards high revenue generating products;
vii) customer information is adequately safeguarded. In tandem with the changes and developments in the distribution system, the RRI was revised in 2005 and further changes were made in 2011. On matters related to claims, member companies have been urged to monitor claim rejection rates in their efforts to improve future customers’ understanding about product features, benefits and exclusions and to set up an independent claims committee to review cases which have been referred by the claims manager. Under the newly revised RRI which was implemented with effect from 1 January 2012, all Third Party Call Centers/Telemarketing Companies are required to be registered with LIAM and the team leaders have to pass the PCEIA and for those who sell investment-linked products, are required to pass the Certificate Examination in Investment-Linked Life Insurance (CEILLI). c. Rules on Registration of Intermediaries The comprehensive set of Rules on the Registration of Intermediaries covering the agency force and other distribution channels was introduced in August 1999.
“Moving into the next decade, the role of LIAM would be more important in the facets leadings up to the liberalisation of the financial services sector.
d. Guidelines on Minimum Qualitative Criteria for Life Agency Force The registrations are categorised broadly under individual intermediaries and corporate bodies. Individual intermediaries refer to life insurance agents and employees of financial institutions. Corporate bodies refer to companies appointed by life insurers to solicit and distribute life insurance products and these include Agency Leader Corporations and Corporate Agents. The Guidelines on Minimum Qualitative Criteria (MQC) for the Life Agency force was introduced in 1999 to enhance the quality of the agency force by imposing minimum industry standards on the recruitment of agents, training requirements, production requirements, promotion criteria and persistency ratio. The guidelines have been revised several times over the years in tandem with the progress and demands in the industry. In the last revision where the changes were introduced in January 2011, the number of required hours of training was increased and the criteria Each category of intermediaries is subject to strict registration requirements such as a pass in the Pre-Contract Examination for Insurance Agents (PCEIA) and minimum paid-up capital.
for promotion and maintenance of contracts of agents, supervisors and managers were fine-tuned. e. Inter-Company Guidelines on Replacement of Policy The industry guidelines to deal with external replacement of policy (ROP) was introduced in January 2011. The objectives of this guideline are to develop a common understanding and establish a decisive procedure in dealing with external ROP; to deter unwarranted ROP that may tarnish the best practices of life insurance companies and to maintain the trust that policyholders place on life insurers knowing that the insurers will conduct their business ethically and with integrity. Under this set of guidelines, a company may lodge a complaint on ROP when there is a purchase of a life insurance policy within 12 months before or after an existing life policy has lapsed, surrendered, partially surrendered or forfeited. Hence, member companies are required to adopt stringent measures to deter ROP and put in place an effective tracking mechanism to detect the number of ROP cases. The tracking should be 12 months before and 12 months after the agent leaves the previous company.
f. Code of Ethics and Conduct LIAM has introduced a set of Code of Ethics and Conduct for the industry in April 1990. The Code was subsequently revised in May 1999 following the implementation of the Insurance Act 1996. The Code is applicable to all directors (executive and non-executive), employees and intermediaries. It aims to promote and maintain the highest degree of standards and integrity among employees and intermediaries in the life insurance industry. The Code comprised of 3 parts i.e. Guidelines on the Code of Conduct, Code of Ethics and Conduct for Life Insurance Selling and Statement of Life Insurance Practice. Companies are required to submit a quarterly report to BNM on breaches observed during every quarter of the year and the corrective or punitive actions that were taken. Cases of fraud are to be reported to BNM and the police.
QAs one of the key financial pillars of Malaysia’s financial system, what makes LIAM a stable organisation? Our member companies share a common objective of positioning the life insurance industry as a major financial service provider in the economic development of the country. The strength of the Association is attributed by the solidarity of our member companies.
Moving into the next decade, the role of the LIAM would be more important in the facets leadings up to the liberalisation of the financial services sector. Associations (FOMCA) and participate in their activities to promote financial literacy among Malaysians.
QCan you elaborate the role of Insurans Hayat Cares? The Asean Economic Community (AEC) blueprint that will be finalised by end of December 2015 will present a host of challenges and opportunities for the insurance market in ASEAN. Trade associations such as LIAM will have to play an important role to voice its opinion and recommendations to influence the policy decision making process. Caring for the community and insuring the nation would be our ultimate accomplishment as Malaysia moves into a high income nation by year 2020. Over the last 40 years, apart from being a leading insurance association in the country, LIAM also plays its part in giving back to the community via its Life Insurance Day. It started back in 1991, where LIAM contributed to the underprivileged and the needy in different parts of the community. Since then, this project has been celebrated on a yearly basis with a myriad of activities ranging from blood donation, contributions to orphanages, old folk homes, paediatric wards and outward bound activities for teenagers.
“LIAM is a member of the Asean Insurance Council (AIC) since its inception in 1978 and to date, the AIC has gained significant recognition by ASEAN regulators as a professional body representing the interests of insurance players in this region.
LIAM is a member of the Asean Insurance Council (AIC) since its inception in 1978 and to date, the AIC has gained significant recognition by ASEAN regulators as a professional body representing the interests of insurance players in this region. At the domestic level, LIAM will continue to play an integral role to engage the regulators and various stakeholders such as the agency bodies and consumer groups. We believe it is important to strike a balance in any effort to promote the development of the life insurance business. Different stakeholders would naturally have their own interests and these should be aligned and strategized to create a win-win formula. LIAM strives to continue its noble efforts by bringing its community service programmes to the next level through the Insurans Hayat Cares platform which was launched in conjunction with LIAM’s 40th Anniversary this year. Over the years, LIAM has built a good working relationship with the authorities particularly the Central Bank of Malaysia. In addition, we have periodical meetings with the National Association of Malaysian Life Insurance Field force and Advisers (NAMLIFA), the body that represents the life insurance agents, to discuss matters concerning the agency force. LIAM had also engaged with the Federation of Malaysia Consumer Insurans Hayat Cares is created to meet the objective of the Association to be more effective in engaging with the community on an ongoing basis. We believe the spirit of caring and sharing should be an integral part of the life insurance business and we should spread the message of love all year round. Some of the activities that have been organised/being planned are:
On 21 August 2014, LIAM hosted a community service program for about 100 underprivileged children from two homes namely Asrama Darul Falah (ASDAF) and SHELTER Home. LIAM’s representatives took time off their busy schedule to spend a day with these children from different ethnic groups and religions. Activities such as Money Crossword, Road Safety Puzzle and Financial Literacy Quiz were organized to add more excitement to this event. Preparations are underway to organise a festive visit to Cancer Unit (Paediatric Ward) of Hospital Kuala Lumpur in February 2015 and a nationwide Blood Donation campaign throughout all the 13 states in Malaysia in August 2015.
QDo you have any words on this significant milestone? This is a very special milestone for all of us as we celebrate our 40 years of achievements. LIAM went through thick and thin, adapting to regulatory changes and undergoing transformation process along the way. Today, LIAM is standing tall and has become a key financial pillar of Malaysia’s financial system LIAM is collaborating with Cancer Research Initiatives Foundation (CARIF), a non-profit organization on cancer research, to embark on an awareness programme on Cancer. Through this collaboration, we hope to share our experiences in educating the community to be aware of Cancer and promote cancer education to the young generation. The “Be Frank” booklets printed for both male and female featuring top 5 cancers in the country and highlighting the steps that one has to take to reduce the risks of cancer. Testimonies of cancer survivors are also shared in the booklets to inspire and encourage readers to continue to live a wholesome life of hope. LIAM will be distributing 50,000 booklets in multi languages to the general public.
“The young leaders must share the same passion, vision and core values carried by the past industry leaders which will eventually help to achieve Government’s aspiration.
Thanks to the continuous support from the industry regulators, member companies and stakeholders who have given a lot of time, guidance and advice in our handling of challenges and issues facing the life insurance industry. While though we can stand proud to the many accomplishments we have recorded, we will continue to work towards the Government’s aspiration to ensure that at least 75% of the has life insurance or takaful protection by year 2020. The young leaders must share the same passion, vision and core values carried by the past industry leaders which will eventually help to achieve Government’s aspiration.
rakyat In aid of cancer research in Malaysia, LIAM sent a team of 390 runners from 11 member companies to participate in the 34th Terry Fox Run 2014 (also known as Marathon of Hope) on 2 November 2014 and sponsored merchandise items from CARIF. (Note : Insurans Hayat is the Bahasa Malaysia word for Life Insurance.)