Foreign workers: Insurance Scheme Unfair To Manufacturer

THE Federation of Malaysian Manufacturers (FMM) is strongly of the view that the government should abolish or at least defer the mandatory health insurance scheme for foreign workers.

FMM had submitted the manufacturing industry's concerns over the implementation of the scheme for foreign workers.

The policy, which came into force on Jan 1, has several issues that need to be clarified. Employers also face difficulties in complying with some of the provisions. As an interim measure to rectify anomalies, FMM has drawn up a list of recommendations, including that:

The government should not need to appoint approved insurance service providers, set the premium rate or stipulate the class of treatment for the scheme. The government should focus on the minimum policy coverage and the type of treatment to be covered.

The government, specifically the Health Ministry, should make public the criteria and process used to select and approve the 17 insurance service providers.

Employers should be allowed to negotiate with insurance companies of their choice. Employers already providing medical benefits to workers should be exempted from purchasing separate medical insurance cover from "approved" insurance companies.

As a case in point, FMM said one of its members, with 6,000 foreign workers, is self-insuring medical costs for its workers at a cost of RM150,000 per year, in contrast to having to pay fees of nearly RM720,000 per year under the compulsory insurance scheme.

The ministry had tried to justify the scheme by saying that government hospitals had accumulated large unpaid bills for services rendered to foreign workers. This may not necessarily be true.

The ministry should carry out a thorough analysis of the data on defaulters.

It could be that the main culprits were "illegal foreign workers, the self-employed, those employed by sub-contracting agencies or transient workers in the construction and logging sectors".

The new scheme is effectively, therefore, a subsidy by registered legal foreign workers to illegal workers.

The scheme is unfair to the manufacturing sector as most employers in the sector have already lodged a bank guarantee with the ministry.

It is inaccurate to assume that the scheme has the support of the affected stakeholders and could continue to be implemented because 110,000 foreign workers have reportedly purchased the insurance.

These stakeholders are likely to have been compelled to proceed with the purchase because they needed to extend the work permits of their foreign workers.

The FMM statement also said these and other issues could have been minimised through a more extensive consultation with all relevant stakeholders. There was no prior consultation with FMM.

2011/03/17

TAN SRI MUSTAFA MANSUR,

Federation of Malaysian Manufacturers, Kuala Lumpur

The Going Gets Tough For Takaful Industry

By Rupinder Singh

Published: 2010/09/08

Malaysia's takaful industry is expected to step up its performance now that an additional four operators have been issued licences to start business next year, said industry players.

Takaful operators were caught unaware last week when Bank Negara Malaysia announced four new licences instead of two.

"With 12 operators in the country now, we have to work harder to gain market share and profits," said an executive from a takaful group that has been in operation for more than 10 years.

Although Malaysia's takaful industry has seen tremendous growth in the last five years, it still lags behind its conventional peers in terms of total insurance market penetration and share.

It is understood that the penetration rate for takaful industry in Malaysia is around 10 per cent, compared with 40 per cent for conventional insurance.

Another existing takaful executive said the entry of four new players is against the spirit of consolidation that the regulator has been propagating.

However, he said the regulator may have decided to add more players since the Islamic banking and takaful industry has yet to command 20 per cent of the banking and insurance market share targeted by 2010.

Takaful fund assets comprise only 8 per cent of the total assets of the Malaysian insurance and takaful industry although it has more than doubled in this same period from RM5.87 billion in 2005 to RM10.5 billion in 2008 and RM12.4 billion in 2009.

Prime Minister Datuk Seri Najib Razak said last year that the liberalisation measures, including new licences, are in line with the provisions and timetable set out in the Financial Sector Master Plan (FSMP) announced in 2001.

The government said then that the measures are aimed at enhancing "inter-linkages to leverage on global developments in Islamic finance and reinforce Malaysia's position as an international Islamic financial hub."

In this context, it will be interesting to see how new takaful players would contribute in areas where there are gaps in the financial system and in which there are new areas of growth in the financial system.

The four new licences issued to joint ventures are between American International Assurance Bhd (70 per cent) and Alliance Bank Malaysia Bhd (30 per cent); AMMB Holdings Bhd (70 per cent) and Friends Provident Group plc, UK (30 per cent); ING Management Holdings (M) Sdn Bhd (60 per cent), Public Bank Bhd (20 per cent) and Public Islamic Bank Bhd (20 per cent); and the joint venture between The Great Eastern Life Assurance Co Ltd (70 per cent) and Koperasi Angkatan Tentera Malaysia Bhd (30 per cent).

Existing takaful operators include CIMB Aviva Takaful Bhd, Etiqa Takaful Bhd, Hong Leong Tokio Marine Takaful Bhd, HSBC Amanah Takaful (Malaysia) Sdn Bhd, MAA Takaful Bhd, Prudential BSN Takaful Bhd, Syarikat Takaful Malaysia Bhd and Takaful Ikhlas Sdn Bhd.

In addition, Malaysia has four Retakaful operators, namely, ACR Retakaful SEA Bhd, MNRB Retakaful Bhd, Munchener Ruckversicherungs-Gesellschaft (Munich Re Retakaful) and Swiss Reinsurance Co Ltd (Swiss Re Retakaful); and one International Takaful Operator in AIA Takaful International Bhd.

6 Simple Ways To Claim Hospital Benefit (for Takaful Mesra, Sarjana, Prima, Warisan & Medic Save

1. You need to be admitted at least one (1) day or receiving treatment at the treatment room for six (6) hours.

2. Once you out of the ward, get 'discharge note' that contains the date in and out of hospital, and diagnosis of disease you are experiencing. Only the 'discharge note' is needed to claim admission to the ward less than a week.

3. If you are admitted to the hospital for over a week, the 'medical report' to be submitted for review of the Etiqa Takaful. Application for a 'medical report' may be made to the hospital on payment of RM 40.00 and can usually be received within four (4) weeks.

4. Fill in the form of claims that can be taken from the nearest Etiqa branch or through your representative. Include a copy of 'discharge note' or 'medical report', copies of three (3) pieces of the front page of the policy and claim form has been filled (in Etiqa Takaful, which required only a copy, no need for the original policy).

5. Send to a branch near you. Cheque payments will be accepted through the mail to your current address in less than a month.

6. For any problems or queries about the status of claims, please call our customer service line at 1-300-13-8888 (Etiqa Oneline Contact Centre).

by Nur Amin Abdullah

Recommended Plan 2011 : Takaful Warisan

We all hope that our legacy and lineage will carry on into the future; and that our future generations will be well taken cared of. Etiqa Takaful understands this concern and wish. By taking into consideration your aspirations and hopes, we have designed a plan that helps you provide for those to come.

Etiqa Takaful Warisan is a takaful scheme that offers savings and coverage benefits which enable you to plan your finances for the wellbeing of yourself and the generations to come.

BENEFIT

Enables the continuation of coverage until the age of 88 years even though the contribution has stopped. This is the advantage of Etiqa Takaful’s products.

At the end of the contract period, the total sum of the Participant Account will be returned together with the profit sharing from the participant’s account and the excess of the Participant Special Account.

Participation of children aged from 6 months is allowed with a coverage of up to RM200,000.

Should total permanent disability happen, the coverage sum will be paid in 3 payments. 20% from the coverage sum and accumulated Participant Account as well as the profit from the Participant Account once the disability is confirmed, 40% at the end of the first and second year from the date of disability.

QUALIFICATION OF PARTICIPATION

Age limit : 6 months to 60 years.

by Nur Amin bin Abdullah

Etiqa Takaful Bags Awards In 5 Categories

Etiqa Takaful Bhd bagged awards in five categories at the second Takaful Annual Dinner and Awards Night yesterday.

It was named the Best Group Business Operator and the Best Bancatakaful Operator in two categories.

Adventurine Agency Sdn Bhd representing Etiqa Takaful won the Million Dollar Producer Award, while Zulkifli Othman, an Etiqa Takaful agent, took home the Million Dollar Agency Award.

It also won the Best Group Business Producer and Group Takaful Business for its partnership with Bank Rakyat.

BERNAMA

Parliament Issues - Increased Insurance Rates

Insurance should be a requirement for every person, not a burden. And each person must think who he is not forced to take insurance but he actually need insurance. If he was wrong here, all the statement after this will continue the mistake.

Why the need? Because in the history, if the vehicle is not covered by an insurance, the innocent victims will always be abused. Imagine that your car broken by others, and they eager to avoid by excuses such as no money to pay damages. At that time, who would be hard? Of course it was us. In my opinion, the issues raised by the members of parliament even though it's good, a statement of 'insurance company is the fraudsters' is too much and shows immaturity of them as members of parliament.

The issue of late release of the accident claims is not the insurance company's isseu. It was a legal issue. Let say, if you are the innocent party and those who was violate you did not want to plead guilty, who is the party that the insurance should be claimed on? If you claim on your policy, then you will lose the NCD (Non Claim Discount) that you intended to save on your insurance premium next year. If both parties do not want to plead guilty, the case had to be brought to the court. Who would bear the costs of the court? You? Of course not. All the expenses will be bear on the insurance company who try to help you to save your NCD. The court will usually takes time and it is a normal process. Because of this, sometimes it will continues for years, but what you have to pay before, you can actually get money back from the insurance company.

For example, if your car is missing, the police will investigate, and after six (6) months and the car is not found, the case will be closed. After that the police will give permission to the insurance company to pay compensation. So, there is no reason that the claim is said to be slow.

In Malaysia, an understanding of insurance is still in early stage. Therefore, the discussions of the insurance issue should be continued. Do not be afraid to meet representatives of the insurance, just ask what you do not understand .. but not run from them! Now there are many good agents and some agents have the qualifications and integrity and should be respected. Many insurance agents now have a Masters and Doctorate in areas of legal and financial management. Try can keep in touch with them.

The question of where the money go if we never had claim? Have we asked ourselves, from where the money claim of thousands of dollars that we claim when we only pay RM300 for renewing the car insurance policy? Actually the money is coming from the common pool (insurance funds). All moneys will be taken from the pool. What we pay for it were included in the fund. Thus, it is important for insurance companies to ensure that there is money in the pool and the money should always be there for all of its members to ensure there is no problem for the claim. The premium paid was accompanied by a fair and just, and was named equitable premium. The owner who has expensive cars will pay a high premium where the premium charge for a cheap cars is low. For example, the owner of the new Proton Saga BLM 1.3, only need to pay an annual premium of RM600 while the BMW 5 Series 2.5 owners will have to pay more than RM 6,000 per year premium. This is what equittable premium is all about. If you did not claim earlier this year the premium money is always there for you that would claim the next year or for other car owners who need to claim.

Replying to the issue of car insurance rates that are going up, everything has been studied for ensuring that the common pool is sufficient to last the next few years. You can see in the newspaper or at the police station, the rate of accidents and claims much improved in recent years and during this time many insurance companies incur losses until there is to be closed or merged with another company to breathe because of the common pool had suffered a deficit. For example, Takaful Ikhlas has joined with Allianz Insurance Company earlier in this year.

Actually, the insurance rates today was set by the Bank Negara Malaysia, not the insurance company itself. So it is not appropriate if the insurance company to blame. Imagine all the insurance companies in Malaysia were closed, what about our fate? Who will help? Friends? Even our siblings may not able to help.

Third party insurance rates are high? You are right. In fact today, the first party insurance is cheaper. You will not believe. I could please calculate later. For example, a friend of mine has been to the post office to renew the third party insurance for the his old Proton Wira and he was charged at RM500. At that time he did come to me. I help him first thought of the same insurance coverage for only RM298. There was a gap right? Always ask the right people, not the people like us. In my opinion, the increase of third party insurance rate is only to educate the public. Actually, on these day, no one should select the third party policy. Because this type of insurance does not cover the owner's car itself. In the past when I have not learned about insurance, I had an accident. My car fell off the hill. Thank God I am safe but what about the car? Crushed, but it can not claim damages because the insurance protects only the third party. I had to use my own money, amounting to nearly RM4000.00 to fix the car myself. If I bought a first party insurance, I should just save it for my family expenses for the future. I should only need to add another RM100 when renewing insurance for my car. At least I have some money aside to face unexpected disasters like that. So, stay away from the third party insurance, care about your future.

In this life we have been more time to improve ourself. Maybe there are two ways to deal with rising insurance rates for this last.

First, drive a car with attitude. Improve your driving in a safe, less-tempered attitude and stop the reckless driving. Remind other people around you as well. Remember, drive without the attitude will definitely happen sooner or later an accident. Do not believe? Try it ..
Our responsibility is to reduce accidents and therefore, reduce the insurance rates.

Second, maybe we can co-added income such as other friends who have been successful. We are together to learn from them so we can deal with not only the increase in insurance rates, the actual increase in inflation rates and petrol prices are tens of times the impact of rising insurance rates.

Integrity Comes First!

Nur Amin Abdullah

Senior Consultant,
Etiqa Takaful Berhad

BBA (Hons.) Insurance, UiTM