US$5.2 Million Claim - Sex In Car

A United States woman who contracted a sexually transmitted disease from her partner during romantic encounters in his car has been awarded US$5.2 million (S$7.2 million) in damages from his vehicle insurance company. The woman in the state of Missouri successfully claimed her partner had negligently infected her with human papillomavirus (HPV), and that his policy covered her for "injuries and losses".

Referred to in court documents only as M.O., the woman had requested an award of US$9.9 million, before an arbitrator determined a sum of US$5.2 million would cover her "damages and injuries".

"Insured should have disclosed his diagnosis to M.O. prior to the sexual activity that occurred, but he did not," found the arbitrator.

GEICO, the insurer, had rejected the woman's initial settlement offer, and last year contested the award, but it was upheld by the Missouri Court of Appeals this week.

HPV is one of the most common sexually transmitted infections in the US, and high-risk strains can cause cancer. There is a vaccine against it.

In her initial settlement offer, the woman said she had contracted HPV during unprotected sexual encounters in her partner's vehicle in late 2017 despite him "having knowledge of his condition".

The arbitrator found that her partner had "been told that his throat cancer tumour was diagnosed as HPV positive". The woman requested compensation for "past and future medical expenses", as well as "past and future mental and physical pain and suffering".

Australia Life Insurance Changes

Potential changes to life insurance commission caps could see up to 87% of financial advisers stop providing standalone risk insurance advice, decimating the life insurance industry. Around 67% of financial advisers would stop providing standalone risk advice and a further 20% are unsure if they would continue if life insurance commissions are subject to further changes.

The Life Insurance Framework (LIF) has had no material impact on advice quality since its introduction in 2018 and has only quashed the ability of advisers to service clients with relatively simple needs.

Instead, the ongoing separation of product and advice — leading to the breakdown of vertical integration and the institutional exodus from personal advice — has had the biggest impact on lifting standards, followed by higher education and training requirements. Only 5% of advisers believe LIF has had a material impact on advice quality. The LIF deals with adviser and licensee remuneration as part of reforms introduced by the government.

Dependence on life insurance commission - The advice industry is heavily dependent on life insurance commission revenue, with 94% of advisers accepting life insurance commissions. Furthermore, 70% of advisers do not plan to change the way they charge for life insurance advice and a further 17% are unsure.

Almost 70% of advisers do not believe consumers will pay a fee for risk insurance advice, with a further 16% unsure.

Since the introduction of LIF, 30% of advisers often turn clients away and 42% of advisers sometimes turn clients away because their needs are too simple and it is impossible to profitability service them, under the current regulatory regime and reduced commission caps. Less than a quarter of advisers believe that current commission caps (60% upfront and 20% ongoing) are appropriate while 73% of advisers believe they are inadequate.

The COVID-19 pandemic also highlighted the problem with rigid two-year clawback provisions with 62% of advisers indicating that 1-10% of new risk insurance business had been subject to a clawback, due in part to clients suffering financial hardship linked to the pandemic.

Advice processes - The Treasury are advised to simplify advice processes and avoid tinkering with life insurance commission rates to improve advice accessibility, affordability and quality. LIF is not perfect but it is better than some of the alternatives that have been suggested including a complete ban of commissions. Further changes are unnecessary and would have many potential unintended consequences including fewer people seeking professional advice, fewer advisers providing life insurance advice and the financial cost of caring for the sick and injured falling back on families, society and the government.

Japan Request Tourist To Have Medical Insurance

The Japan Tourism Agency released guidelines for foreign tourists, demanding travel agencies ask tour participants to wear face masks and have medical insurance. The guidelines note that tourists refusing to follow the measures may be denied the opportunity to participate in Japan tours.

The government agency compiled the guidelines as Japan is slated to resume the acceptance of tourists from abroad, after a pandemic-induced hiatus. For the time being, only those on escorted package tours from areas where Covid-19 infection risks are low will be allowed into the country.

The guidelines also demand keeping activity records of tourists, including where they sat on transportation facilities. If tour participants test positive for Covid-19, travel agencies will identify people who were close contacts, based on such records. Other tour participants will be allowed to continue with their tours.

The guidelines are based on the results of trial tours to confirm whether it is possible to respond appropriately to tourists testing positive for Covid-19.

Selling Singapore Ghost Policy

A financial adviser told four clients that he could sell them exclusive “resale” insurance policies, forging several documents to support his claims. However, these policies did not exist and Alvin Koo Jing You cheated his clients into transferring more than S$300,000 (RM958,161) to his personal bank account.

He used the money to pay for personal expenses such as his mother’s surgery fees and credit card loans, business expenses, and to make restitution to some victims when they found out about his crime.

Yesterday, Koo was jailed for two years and eight months after pleading guilty to three counts of forgery for the purpose of cheating. Three other similar charges were taken into consideration for sentencing.

The 35-year-old Singaporean worked for Great Eastern Life Assurance at the time of his offences from 2017 to 2019. He was fired from the insurer in early 2019 after his actions came to light.

The court heard that he came up with a ploy to sell his existing clients’ insurance policies, known as resale policies, to the victims. These policies are typically surrendered by their policyholders before maturity and can be sold to a third party.

However, those policies that Koo peddled were held by clients who had not said that they wanted to surrender them. Koo then told his victims that he was able to sell them these policies and that they were exclusive to clients who had already bought certain plans.

He forged certain documents to support his scheme, typing them up on a Microsoft Word document using his personal laptop and pasting the Great Eastern logo there. This included maturity benefits letters, bank details letters, and “official receipts”.

He also used genuine Great Eastern purchase documents, forging the signatures of the purported original policyholders on these forms or representing himself to be the beneficial owner.

Koo told one victim, a 46-year-old Japanese man, that the resale policies were sold exclusively to high net worth clients who had bought Universal Life and Prestige Life plans. The man then bought four “resale policies” valued at S$105,000 from July to November 2018. When he did not receive any policy documents from Great Eastern, he tried to clarify things with Koo.

Before Koo could respond, the victim found out from another victim that the policies were not genuine. He contacted Koo for a refund and Koo made restitution of S$1,000 within a day or so. When the agent was placed under investigation, he cheated a 48-year-old woman who had hired him because his father-in-law previously tutored her daughters.

Koo cheated her of S$130,500 between July 2018 and June 2019, forging 27 documents to do so. He paid her about S$100,000 in the form of “maturity proceeds” and also made further restitution of S$3,200. She discovered what had happened only in April 2019 when Koo told her that he was leaving Great Eastern for another company and she contacted her new Great Eastern representative to ask about the “resale policies”.

Great Eastern has paid restitution to the victims. Koo entered into an agreement with his former employer to pay off the sums in instalments as well. He defaulted on the arrangement in January this year and has not paid back S$96,000.

For each offence, Koo could have been jailed for up 10 years and fined.

Murder: Life Insurance

A woman killed her own husband in Amritsar to claim the insurance money. The husband had been unwell for a long time, which had caused a financial strain for the couple. To solve this, the wife killed her husband so as to claim the insurance money.

The incident has been reported from Bulara village in Amritsar’s Jandiala region where a woman, Narendra Kaur, accompanied her husband, Manjeet Singh, to Beas to buy his medicine on May 5. Later, the police found Manjeet’s dead body in a pool of blood.

During the investigation, it was found that his wife was the prime suspect. The Deputy Superintendent of Police (DSP), Sukhwinder Pal Singh, said, “During interrogation, Kaur admitted to her crime. She said that the house was in shambles due to financial instability. All the money was going towards her husband’s treatment who had been unwell for a long time. Being a Life Insurance Company (LIC) agent herself, she knew that she could benefit from her husband’s insurance money and so, she killed him.”

He also added that she had murdered him using a sharp weapon. The woman has been arrested and further investigation is underway.

MPHB Exit General Insurance

MPHB Capital Bhd is finally poised to exit the general insurance business, a quest it started many years ago without much success. In the latest announcement filed with Bursa Malaysia last week, the company is proposing to dispose of its 51% equity interest in MPI Generali Insurance Bhd (MPIG) to Italian insurer Generali Asia. MPIG is currently a joint venture between MPHB (51%) and Generali Asia (49%).

It sold a 49% stake to Generali in 2015 and had been looking to dispose of another 21% to the Italian insurer since 2020. If the disposal had been approved by the authorities previously, Generali would have increased its stake to 70% — the maximum shareholding allowed for a foreign insurer — and MPHB Cap would have been left with 30%.

MPHB Cap did not want to be left holding 30% of the general insurance company. It is a highly competitive industry and if the partner is not strong, holding 30% may not be worth the investment.

Affin-AXA  - On the same day the company announced the deal with Generali last week, Affin Bank Bhd told Bursa that it had obtained approval from MoF to dispose of 21% of its equity interest in AXA Affin Life Insurance Bhd (AALI) and a 2.95% stake in AXA Affin General Insurance Bhd (AAGI) to Generali Asia NV.

Affin Bank currently owns 51% of AALI and 49.95% of AAGI. AXA owns the remaining equity interest in AALI and AAGI that Generali has proposed to acquire. Generali holding 70% and Affin 30% in a special purpose vehicle that will carry the life and general insurance business of both companies.

Generali’s acquisition of MPIG is happening at a time when many foreign insurers are exiting or have exited the Southeast Asian market. It has been said that Generali is strengthening its presence in Malaysia as it may not have the muscle to expand in Europe.

In MPIG’s website, its shareholders’ funds for FY2020 stood at RM670.9 million. Assuming the transaction is concluded at one time book value, it potentially translates into MPHB Cap getting about RM330 million, based on its 51% stake in the joint venture.

General insurers generally command lower premiums than life insurance companies. In July last year, AMMB Holdings Bhd proposed the sale of its 51%-owned AmGeneral Holdings Bhd to Liberty Insurance Bhd (LIB) for RM2.29 billion, to be satisfied via cash and a 30% stake in LIB.

In June 2016, Swiss insurance company Zurich Insurance Group Ltd (ZIG) acquired MAA Group Bhd’s MAA Takaful Bhd (now known as Zurich Takaful Malaysia Bhd) for RM525 million, valuing the transaction at about four times book value. That was an exception, as the average price-to-book value paid for Multi-Purpose Insurans Bhd, AmLife Insurance Bhd and AmFamily Takaful Bhd by their buyers averaged 2.13 times.

AXA Exit Malaysia (Again)

Bank Bhd has obtained approval from the Ministry of Finance (MoF) to dispose of 21% of its equity interest in AXA Affin Life Insurance Bhd (AALI) and 2.95% stake in AXA Affin General Insurance Bhd (AAGI) to Generali Asia NV.

Affin Bank currently owns 51% in AALI and 49.95% in AAGI. In a statement on Monday, Affin Bank said it will enter into a share sale agreement with Generali Asia for the AALI and AAGI disposals, subject to the satisfaction of the remaining signing conditions under the implementation agreement and further announcements will be made accordingly.

Affin Bank has also agreed for the general insurance business of AAGI and MPI Generali Insurans Bhd (MPIG) to be merged under AAGI whereby AAGI will acquire certain assets and liabilities of MPIG via a business transfer to create an enlarged company, subject to the approval of BNM.

Following that, a new local company (Newco) will be incorporated to hold all of the shares in AALI and AAGI (MergeCo). Affin Bank will, in turn, be holding 30% equity interest in the Newco, with Generali holding the remaining 70%.