EPF Allows Flexible Contribution

The Employees Provident Fund (EPF) is abolishing the RM50 minimum requirement for members who voluntarily contribute to their accounts effective July 1.

This will allow them to contribute any amount at any one time, the country's largest pension fund said in a statement.

“A little savings set aside today will go a long way in ensuring the retirement wellbeing of our members in the future.

“Therefore, we want to ensure that members are able to contribute in any amount, at any time, within their financial abilities through the flexibilities introduced,” said EPF Deputy Chief Executive Officer Datuk Mohd Naim Daruwish.

The accumulated maximum amount to be contributed into each account, however, remains capped at RM60,000 per annum.

EPF members can contribute voluntarily to their accounts either through the 1Malaysia Retirement Scheme, self-contribution or the top-up savings contribution.

Mohd Naim said the option to make voluntary contributions was in line with a retirement agenda that was inclusive, as it was open to all Malaysians who are self-employed.

“Non-Malaysians with a legal work permit may also contribute voluntarily by registering as a member,” he added.

EPF said in addition to the removal of the RM50 minimum contribution, members could contribute any amount to Account 1 belonging to their sons or daughters who were also EPF members through the top-up savings contribution.

Previously, the scheme only allowed EPF members to contribute to their parents’ or spouse’s Account 1.

For more information, members can call the EPF Contact Management Centre at 03-89226000, refer to the EPF website at www.kwsp.gov.my, or visit any of the 67 EPF branches nationwide.

Suicide & Life Insurance

Salt Lake City - An insurance company has asked a judge to throw out a Centerville woman’s lawsuit that seeks payment of a $500,000 policy claim on the life of her husband, who was shot to death by police.

American General Life Insurance Co. was sued in U.S. District Court in 2016 by Molly Farrand, whose husband, Vincent, took the policy in 2011, three years before he was killed in a confrontation with Centerville officers on April 13, 2014.

“... The undisputed facts show that Mr. Farrand’s death was the result of his own criminal and intentional conduct when he exited his home, gun in hand, intoxicated, and confronted police officers,” attorneys for the insurer said in court documents filed Friday, June 22.

The man defied repeated police commands to drop the gun and instead tapped the trigger and told the officer to just “do it,” the company said in its motion for summary judgment.

“Finally, he raised his gun towards the officer, who then shot him. Mr. Farrand’s death is certainly a tragedy, but it is not a covered ‘accident,’” the company said.

Molly Farrand first filed a civil rights suit against Centerville City and the officer who fired the fatal shots, Jason Read. The $2 million suit filed on March 24, 2016, alleged Read “executed” her husband by shooting him twice in the back outside the couple’s home.

In a settlement of that suit, the city paid Farrand $127,000 in damages. Although it settled, the city did not admit fault.

American General’s Aug. 18, 2014, letter to Molly Farrand said it was denying the life insurance claim because Vincent Farrand “was suicidal and wanted ‘suicide by cop.’” The letter also quoted the police investigation report that said an autopsy found the man had a 0.22 blood alcohol content.

Farrand’s attorneys criticized the suicide-by-cop rationale. For it to justify denying the claim, “they would have to make the untenable argument that when interacting with law enforcement — even with a gun, considering that Utah is an ‘open carry’ state — the expected and anticipated result is the police officer shooting the suspect,” the suit said. “Utah law is clear that Utahans have a lawful right to ‘open carry’ weapons, especially on one’s own property.”

Further, it is “irrational and unreasonable” that the claim should be denied because Vincent Farrand was intoxicated, the suit said. Utah law is clear that provisions that limit or exclude coverage should be strictly construed in favor of the insured, the suit said.

The suit accused American General of failing to adequately investigate the insurance claim, relying solely on the police investigation report and ignoring subsequent developments, such as the city paying a settlement to Molly Farrand, the suit said.

The suit demands at least $500,000 in damages from American General.

In its request for dismissal of the case, American General said the policy defines “accidental injury” as an “accidental bodily injury, which is unforeseen and suddenly sustained without the design or intent of [the] Insured Person.”

A reasonable person would anticipate that conduct such as Vincent Farrand’s “would result in the use of deadly force against him,” American General said. “Under the objective standard, this was no ‘accidental’ injury.”

Read reasonably feared for his life, the company said, and Vincent Farrand’s “clear intention, based on the evidentiary record, was to put police officers in the position where they would have to end his life.”

AMP Sued For Unethical Behavior

Embattled wealth manager AMP is being sued by Australia's financial watchdog over claims its financial planners advised clients to take out new life insurance policies to boost commissions. The Australian Securities and Investments Commission (ASIC) commenced proceedings in the Federal Court against AMP Financial Planning yesterday.

ASIC alleges AMP's financial planners engaged in 'rewriting conduct', where clients were encouraged to take out new life insurance, trauma or income protection policies instead of being transferred within the client’s existing policies. The financial planners stood to gain substantially larger commissions as a result.

ASIC also alleges that by filling out new applications, the financial interest of the AMP Financial Planning clients became exposed to unnecessary underwriting risks.

AMP said in a statement to shareholders it had been cooperating with ASIC since 2014 on the matter. It said it would file its defence in due course.

“ASIC’s pleadings in particular identify the conduct of a former AMPFP adviser, Rommel Panganiban, who engaged in insurance rewriting,” the statement said.

“AMPFP removed Mr Panganiban’s authorisation in 2014 and reported his conduct to ASIC.  Mr Panganiban was subsequently banned by ASIC in 2016. AMP is apologising to the customers impacted by Mr Panganiban’s actions and they are currently being compensated. We have continued to enhance our monitoring and supervision activities to monitor the writing of new insurance policies.”

It's been a tumultuous year for AMP, which has seen its share price plunge from a high of $5.20 in December 2017 to its current price of $3.57.

It also lost two of its top executives, with AMP CEO Craig Meller and AMP chair Catherine Brenner quitting their posts in April. Their exits stemmed from claims made against the financial institution during the Royal Commission into Australia’s banks.

During the Royal Commission, AMP admitted it charged customers fees for financial advice that was never delivered and repeatedly lied to ASIC about its behaviour.

PT Bank Rakyat Indonesia - Life Insurance Arm

PT Bank Rakyat Indonesia - the country’s most profitable lender, is reviving a plan to sell a stake in its life insurance arm after scrapping a similar process more than two years ago, people with knowledge of the matter said.

The state-controlled firm is asking investment banks to pitch for an advisory role in the next few weeks, according to the people, who asked not to be identified because the information is private. The sale of a minority stake in the unit, known as PT Asuransi BRI Life, could fetch at least $500 million, the people said.

Bank Rakyat canceled an auction process for a 40 percent stake in the business in early 2016, opting to spend more time boosting its value before introducing a foreign partner, people with knowledge of the matter. The sale had attracted interest from Hong Kong billionaire Richard Li’s FWD Group, South Korea’s Hanwha Life Insurance Co. and BNP Paribas Cardif, the people said.

BRI Life’s net income increased 55 percent last year to 327.67 billion rupiah ($23 million), according to its parent company’s latest annual report. The insurer has more than 7 million customers, the report shows. Deliberations on a potential stake sale are at an early stage, and there’s no certainty they will lead to a transaction, the people said.

The Indonesian insurance industry has attracted interest from foreign investors including Prem Watsa’s Fairtax Financial Holdings Ltd, which bought control of PT Paninvest's non-life business in 2016 for 2.32 trillion rupiah. Last year, Prudential Financial Inc. agreed to take a 49 percent stake in a life-insurance arm of CT Corp.

Any transaction would add to the $10.4 billion of deals targeting Southeast Asian financial institutions this year, data compiled by Bloomberg show. An official at Jakarta-based Bank Rakyat declined to comment.

Bank Negara May Extend Deadline

Malaysia’s central bank is considering granting extensions to some foreign insurers to give them more time to trim stakes in their local ventures, people with knowledge of the matter said.

Foreign insurers are expected to be given additional time to comply with the ownership limit, as long as they submit plans to show they have made progress in their divestment plans, said the people, who asked not to be identified as the process is private.

The central bank has been urging overseas insurers to reduce their holdings in Malaysian units to no more than 70% as it more strictly enforces ownership limits. The regulator earlier gave these firms until June 30 to cut their stakes, people familiar with the matter said last year.

Bank Negara Malaysia will keep engaging insurers on their plans, the central bank said in an emailed response to Bloomberg queries Thursday. Incoming Governor Nor Shamsiah Mohd Yunus, who will be taking office on July 1, will be briefed on the foreign insurers’ divestment plans and their current progress, the statement shows.

Prudential Plc filed for a potential listing of its Malaysian unit last month, as the insurer explores options to reduce its stake in the business, people familiar said this week. The U.K. insurer hasn’t decided whether to proceed with the listing, and it’s still considering other alternatives like finding a buyer for a minority stake in the business, they said.

Zurich Insurance Group AG is working with advisers to trim its stake in its Malaysian life insurance unit, people familiar said in April. Singapore’s Great Eastern Holdings Ltd and Japan’s Tokio Marine Holdings Inc were also among those weighing deals to cut local stakes, people familiar said last year.

Prudential May IPO

Prudential Plc has filed for a potential listing of its Malaysian unit as the insurer explores options to reduce its stake in the business, people with knowledge of the matter said.

The U.K. insurer submitted an application for an initial public offering of its local subsidiary with the Malaysian securities regulator last month, according to the people. A share sale could raise about $700 million, one of the people said, asking not to be identified because the information is private.

Prudential hasn’t decided whether to proceed with the listing, and it’s still considering other alternatives like finding a buyer for a minority stake in the business, the people said.

Malaysia’s central bank has been urging foreign insurers to reduce their holdings in local firms to no more than 70 percent as it more strictly enforces ownership limits. 

The regulator earlier gave overseas firms until June 30 to cut their holdings, people familiar with the matter said last year. Singapore’s Great Eastern Holdings Ltd. and Japan’s Tokio Marine Holdings Inc. were also among those weighing deals to reduce local stakes, the people said.

There’s no certainty Prudential’s deliberations will lead to any transaction, according to the people. Prudential could wait until the new central bank governor takes office before deciding whether to proceed, one of the people said.