Covid Disruption To Insurance

In the event the Covid19 pandemic has definitively ended, the effects of Covid on the life and health insurance industry could linger on for years.

Distribution - To start, how life insurance is bought and sold may never be the same for many customers. The pandemic sped up adoption of what is sometimes known as "fluidless" or accelerated, underwriting. This involves things like heavier use of digital records and less frequently sending a medical examiner into a customer’s home. Many insurers last year increased the size of policies they were willing to underwrite using data-based and predictive methods.

Young Attracted To Smaller Policies - That coincided with another change, an uptick in sales of smaller policies appealing to younger people. Application activity for U.S. life insurance was up nearly 8% year-over-year in 2020 among people under age 44. Overall, the number of U.S. life policies sold last year grew even as new premiums fell (Limra). That is an indicator of growth in the market for relatively affordable & smaller policies. Bringing a larger number of younger people into life insurers’ pools could reverse a trend toward concentration of risk. The more lives we can spread risk out over, the better we can price it.

Increase Risk - Insurers will also have to face the shifting of risk and cost left behind by Covid-19. Initially, the impact of Covid-19 on mortality was dramatic: Life expectancy fell by a year during the first six months of 2020. That isn’t necessarily a permanent change, but the long-term impact of Covid on life expectancy is still an open question. If the disease becomes less deadly, and if recovering from Covid-19 has no effect on future survival, “life expectancy would return to its previous level.

Underwriting & Product Management - As of earlier this year, life insurers generally hadn’t increased premiums during Covid-19, though in some cases insurers stopped selling some policies for the oldest customers. This is indicative of insurers recognizing the risks of Covid, but also the offsetting benefits of lockdowns, behavioral changes and vaccinations on mortality risk.

Still, insurers will have to grapple with how Covid-19’s many social and health changes evolve. There are several potential “pluses and minuses” for future mortality risks, such as the ill-effects of delayed diagnoses and treatments, set against things like the advance of vaccine technology and behaviors like better social distancing during future flu seasons. The insurer is also watching for any “potential reduced immunity from flu” after what was essentially a missed season of infection.

An individual’s vaccination history is generally not considered when underwriting a life policy. Insurers will still have to assess how vaccination rates in the population lower the risk of any resurgence or variation of Covid-19, or to an aggregate reduction in the cost of care and risk if people still get the disease.

Other forms of health risk covered by insurers may also change. The number of claims for things like dental care may be rebounding as people catch up with missed visits, though there is a practical limit on how often people go to the dentist. The risk is whether missed visits created more dental problems and the need for more expensive procedures.

In disability insurance, claims for coverage due to a long-term inability to work could be due to rise if there are a large number of people with “long haul” post-Covid symptoms and as government benefits and support offered during the pandemic wane. So whether it is Covid-19 itself or the many social and medical changes it wrought that linger, insurers will be grappling with the aftereffects for a long time.

India Postman Set To Sell Insurance

In addition to delivering regular mails, the local postman would soon be able to sell car and bike insurance policies right at one’s doorstep. The service, set to start in Prayagraj and Kaushambi districts from July 1, is being offered by India Post through India Post Payment Bank (IIPB).

The IIPB has been created by the government to deliver banking services in rural areas. This is to avail insurance at one’s doorstep. An individual needs to call 155299 or place a request on the Post Info App or click on ccc.cept.gov.in/ServiceRequest/request.aspx.

However, one needs to have an account with IPPB. Post India have started giving training to our staff members. Any customer can visit the post office to avail the service or if needed, the postmen would visit the customer’s house and provide the facility.

For this, the bank has tied up with Bajaj Allianz and Tata AIG General Insurance Companies.

The insurance facility will be totally paperless and the person will need to show the registration certificate (RC) of the vehicle and the old insurance cover. The amount will be debited from the individual’s IPPB account and policy will be made available immediately.

Death Claim Scam - India

The death certificate of the owner of a private university made by fraudsters to claim Rs 10 crore insurance was not issued by life insurer, an initial police investigation has found. But while it appears to have settled this question, it has led to a more unsettling one — that the government portal for birth and death certificates was hacked and old documents were edited to change name, address and other details.

Since February this year, at least 15 instances of fake death certificates, including this one, have come to the notice of the authorities. Out of these, 13 death certificates were made. The attempt at pulling off the insurance scam was discovered earlier this week when a team from a leading insurance company visited the university owner’s house in South City 1 to verify his “death” and a claim of Rs 10 crore that had been filed in his wife’s name. 

The fraudsters had filed the claim using a fake death certificate and used a fake Aadhaar card to open a bank account in his wife’s name. The death certificate, a police officer said, was not procured from the corporation because there was no record of any application being filed in the university owner’s name or of the insurer issuing one. 

Every death and birth certificate, according to officials, has a unique QR code and serial number and all certificates issued by the civic body can be tracked with the QR codes in the archives. The process went online in 2018. The QR code, serial number and stamp are the same but name, age and address are different. Someone made changes in an existing certificate and took a print.

The QR code on the fake death certificate of the university owner submitted with the insurance company showed the name and address of the original person in whose name it was issued when scanned. 

The fraudsters, had accessed the portal by hacking the login credentials of the registrar, who also has access to the archives as head of the department. The system gives an edit option to authorized persons to make corrections. 

Medical Insurance Scam - Anhui Province

Dozens of health care facilities in the eastern Anhui province were found to have misappropriated nearly 58 million yuan ($9 million) from the public health insurance fund. Provincial authorities have revoked four hospitals’ medical licenses, as well as the professional credentials of 14 employees at Taihe County’s health security administration following an investigation on malpractice. A total of 19 officials in the county — as well as in Fuyang, the city that administers Taihe — have been held accountable for the scam, though it’s unclear if they have received any punishments.

Authorities combed through hundreds of thousands of patients’ medical records from the county’s 50 health care facilities after media reports exposed that the health security administration — entrusted with operating the medical insurance fund — was misappropriating funds from public coffers. All investigated health facilities were found to have been engaged in varying degrees of fraud.

Following the investigation, nine of the county’s private hospitals have voluntarily applied to suspend or stop their public health insurance services. Of the 1.38 million residents in Taihe County, nearly 18% are aged 60 and above, with many requiring frequent medical assistance. 

Despite strict government supervision, scams involving the public insurance fund have time and again made headlines in China. In 2017, two private hospitals in the northeastern city of Shenyang were exposed for hiring “patients” through a third party, while falsifying their medical records and prescribing medicines that mainly benefitted the hospital.

Life Insurance Agents Arrested - Investment Scam

A lawyer and 11 insurance agents were among 24 Hongkongers arrested recently in connection with an investment scam that duped 263 people out of HK$475 million (US$61.2 million) over five years.

Police said they had frozen bank accounts held by members of the syndicate with balances totalling HK$50 million. They were also considering applying to freeze and confiscate 11 properties across the city, worth HK$370 million, believed to have been purchased with criminal proceeds the racket pocketed.

Commercial crime bureau said police believed the lawyer was one of three alleged ringleaders of the syndicate who were apprehended in the operation, code-named “Steeppoint”.

After an investigation that lasted 22 months, the arrests were made. More than 100 officers were deployed to raid 30 locations across the city, including the offices of a law firm and two investment companies, as well as 22 residential flats. During the operation, HK$1.6 million in cash was seized along with a large quantity of documents and many computers.

The gang set up an investment fund in the Cayman Islands with its assets, including a HK$200 million commercial block in Hong Kong. The fund was a high-risk, investment-linked insurance product listed on a platform run by an international insurance company.

The syndicate also controlled 11 insurance agents who were accused of luring victims in Hong Kong and mainland China since December 2013 into investing in the fund by claiming it was a product of the global insurance firm. All the agents also worked for another insurance company.

The gang then established another overseas company that issued convertible notes, or short-term debt, with an estimated value of HK$13 million that they used to buy assets under the fund. The scam unravelled when the price of the fund dropped 93 per cent in July 2018, and it went into liquidation in February 2019.

The bureau began investigating the syndicate after police started receiving reports from the insurance company and the victims from January last year. The victims, aged 24 to 77, included about 250 mainlanders, 10 Hong Kong residents and two Malaysians. Some were housewives and retirees, and the biggest victim lost HK$20 million.

Investigation showed the money the victims invested was not used in the operation of the investment fund, but was pocketed by the racket. The syndicate used the money to buy properties, pay off mortgages and offer monetary rewards to those who helped to find targets on the mainland.

Police arrested the 24 people – 13 men and 11 women – on suspicion of conspiracy to defraud and money laundering. The suspects included two directors of an investment fund management company. This is a highly sophisticated crime syndicate. Its structure involved a number of overseas companies, nearly 100 bank accounts and also professionals, including a lawyer and insurance agents.

Generali Buys AXA Malaysia

Italy’s insurer, Generali has agreed to buy AXA’s insurance assets in Malaysia and take full ownership of a joint-venture it runs in the country to strengthen its local presence. The deals will turn Generali into the second-biggest player in Malaysia’s property and casualty (P/C) insurance market while also allowing the company to enter the local life insurance sector.

The total consideration for the combined deals is around 262 million euros ($312 million). The sale is part of French insurer AXA’s efforts to streamline its business in a restructuring launched by Chief Executive Thomas Buberl, a process which includes selling assets in some countries and markets to boost returns. In December, for example, AXA agreed to sell its insurance activities in Greece to Generali.

Under the latest deal, Generali will buy around 53% of a joint-venture between AXA and Malaysia’s Affin Bank, dubbed AXA Affin General Insurance. It will also take a 70% stake in another AXA’s JV with Affin dubbed AXA Affin Life Insurance. AXA will receive around 140 million euros [$167 million] from the two sales.

Generali has also asked Malaysian authorities to allow it to increase its 49% stake in local joint venture MPI Generali Insurans Berhad to 100%. Generali plans to merge this later with AXA Affin General Insurance. 


Generali will then operate in Malaysia through two companies, one in the P/C business and the other in the life insurance, holding 70% of each company, while Affin Bank will own the remaining 30%. Generali and Affin Bank will also strike an exclusive bank-insurance agreement to distribute P/C and life insurance products.

The deals are expected to complete in the second quarter of 2022. 

Prixa Expands In Indonesia

Indonesian healthcare startup - Prixa - has raised $3 million led by MDI Ventures and the Trans-Pacific Technology Fund (TPTF), with participation from returning investors including Siloam Hospitals Group. This brings Prixa’s total raised to $4.5 million since it launched in 2019. The new funding will enable Prixa to scale its platform and customer base. Prixa uses a B2B model, partnering with healthcare payers like insurance providers and corporations. Through its B2B customers, it currently serves about 10 million patients.

Prixa currently works with four major insurers and has six additional insurers in its short-term pipeline. It also works with Indonesia’s largest third-party administrators, allowing it to reach more policyholders.

Prixa’s platform includes a digital health assistant to answer patients’ questions, telemedicine consultations, pharmacy deliveries and on-demand lab diagnostics. Usage increased during the COVID-19 pandemic as more patients sought online consultations for primary care.

Other telehealth startups in Indonesia include Halodoc and Alodokter (which is also backed by MDI). Both connect patients directly with healthcare and insurance providers. Prixa differentiates by focusing on greater cost control for healthcare payers and positioning itself as a digital primary care platform.

Prixa symptomatically manage patients outside of tertiary care facilities and caring for chronic non-communicable diseases online. Prixa is able to effectively reduce the amount of outpatient claims and downstream inpatient cost incurred by healthcare payers. Additionally, the combination of a growing and robust medical database, as well as proven clinical guidelines, contribute to cost efficiency and service optimization through the standardization of treatment by our healthcare providers.

Bogus Investment Scheme Crippled

Nine individuals aged between 23 and 62 were arrested on Saturday (June 19) on suspicion of being involved in investment scam schemes involving losses amounting to nearly RM1.9 million around Kedah, Kuala Lumpur and Johor.

Bukit Aman Commercial Crime Investigation Department said all the local suspects were detained under Ops Nuri on suspicion of being involved in bogus investment schemes — the Banker Capital Investment Scheme (BKC) and Wow Exchange OU Investment Scheme.

The syndicate would dupe victims by convincing them that their money would be invested in the domestic and foreign investment sectors and promising them high returns with a profit rate of between 100 per cent and 400 per cent. Several packages are offered, ranging from ‘trainee’ packages worth as low as US$100 to ‘Capitalist’ packages worth US$10,000.

The Wow Exchance OU scheme was a cryptocurrency-based investment scheme whereby the syndicate promoted a cryptocurrency platform and e-wallet called WOWX token. The WOWX token is said to be registered and based in Singapore through Wow Global Pte Ltd and is in the process of obtaining a license from the Singapore government.

Investors are instructed to make investment capital payments to several bank accounts directed by the syndicate, but the victims never got any returns from the capital issued for the investments. Police had, so far, opened nine investigation papers on the syndicate, which targeted Malaysians, adding that they have also seized 13 mobile phones, 11 ATM cards, three laptops and five cars as well as RM9,000 cash, 208,000 Korean won, US$26 and S$644.

The case is being investigated under Section 420 of the Penal Code for fraud and Section 4(1) of the Anti-Money Laundering, Anti-Terrorism and Proceeds of Unlawful Activities Act and under the Prevention of Crime Act (POCA) 1959. The bogus investment schemes, which are advertised via social media such as on Facebook, YouTube, WeChat, WhatsApp, proved attractive as they promised high profits as well as affordable investment packages, more so when many affected economically due to the Covid-19 pandemic.

Husband Murders Wife For Life Insurance

A man from Northeast China's Liaoning Province has been arrested and prosecuted for his attempt to cheat a maximum insurance amount of 25.9 million yuan ($3.97 million) by murdering his wife through a deliberate traffic accident.

The man surnamed Zhou was driving his wife surnamed Yan on the Beijing-Shenyang Highway, heading toward Beijing for the Spring Festival holiday on January 27, 2018, when the traffic accident happened in Jinzhou of Liaoning.

Zhou was seriously injured and went into a coma while Yan died on the spot after their car hit the guardrail of the road. However, police discovered several doubtful points about the case, including that there was no sign that Zhou slammed on the brakes before the accident happened and forensic tests on Yan showed there were two kinds of psychotropic medicine ingredients which could not be taken at the same time in her stomach.

Through further investigations, the police found that Zhou had purchased huge amounts of personal accident injury insurances with the total maximum insurance amount as much as 25.9 million yuan since April 2016. The annual premium amounted to 85,000 yuan and Zhou was the only beneficiary. 

He also purchased through the Internet a drug that could put people into a coma, the ingredients of which the police later found matching the ingredients found in Yan's autopsy.

Besides, Zhou had already received 58,000 yuan through his insurance after a car crash on September 19, 2017, in which Yan survived. After two years' treatment, Zhou's physical condition gradually stabilized and he was arrested by the police in March.

Zhou confessed to the police that he and Yan did not have a stable income after they got married and his debts totaled about 6 million yuan after he took out loans from loan companies and banks after his failed stock investment, before he carefully planned and caused the accident.

Policyholders Challenged Kresna Life Bankruptcy

Asuransi Jiwa Kresna (Kresna Life) has been declared bankrupt by the Supreme Court which granted a petition for the insurer's bankruptcy on 8 June 2021. The petitioners were six Kresna Life customers. Other clients though are seeking a judicial review of the bankruptcy decision so that it could be overturned. They want Kresna Life to immediately settle their obligations to customers.

Many customers are surprised by the bankruptcy decision because the insurer had been making some payments. Bankruptcy means that all assets of the insurer will be taken over by the official assignee. As a result, payments to customers will be stopped until all assets have been sold.

Furthermore, customers also urge the Financial Services Authority (OJK) to protect consumers by intervening in the bankruptcy decision and ensuring that all amounts due to customers are settled immediately by Kresna Life.

OJK has found violations in Kresna Life. Thus, the Authority must ensure that the insurance company is liable. This case is not a failure to pay due to financial difficulties and bankruptcy, but a violation of regulations. Kresna Life invests customer funds in its affiliated companies far above the limit allowed by the OJK.

Background - Kresna Life has defaulted on two of its insurance products. This decision was conveyed to policyholders through a circular letter on 14 May 2020. In the letter, the president director of Kresna Life Kurniadi Sastrawinata explained that the COVID-19 pandemic was a force majeure beyond the control of the company. This condition caused the investment portfolio of two of its products, namely, Kresna Link Investa Life Insurance (K-LITA) and Protecto Investa Kresna Life Insurance (PIK), to be problematic.

Kresna Life's financial ability to fulfill the obligations of the K-LITA and PIK policies has been hindered by liquidity problems.

Kresna Life then underwent a trial to postpone debt payment obligations (PKPU) at the Central Jakarta District Court. The insurer sought to postpone every policy redemption transaction that was due from 11 February 2020 to 10 February 2021. The company also postponed the payment of investment benefits on policies that matured from 14 May 2020 to 10 February 2021. The PKPU application was approved.

At that time, the judges were reluctant to explain the legal considerations for the approval of the PKPU. The reason is that they were not obligated to do so. The trial closed with customers and creditors disappointed. They demanded legal transparency and argued that since the PKPU decision was not attended by the OJK, it was considered legally flawed.

Meanwhile, OJK responded by saying that it had never approved Kresna Life's PKPU application. The PKPU decision was eventually withdrawn in February 2021. However, customers have not yet received payments on their policies. Then the group of six Kresna Life customers petitioned for the bankruptcy of the insurer.

Young Indian Rushed To Buy Life Insurance

Most Indian averaging twenty-somethings, kept postponing buying a life insurance policy, until a surge in COVID-19 cases and deaths made them confront her own mortality. The official count puts the number of deaths due to COVID-19 at 380,000, the third highest after the United States and Brazil (though many experts say India's numbers are grossly underestimated due to the low levels of testing for the virus and more people have probably died in India than anywhere else in the world).

When a devastating second wave of the pandemic peaked in India during April and May, the numbers of people aged between 25 and 35 buying term insurance was 30% higher than in the previous three months combined (reported by India's largest online insurance aggregator).

Term insurance - purchases via a popular online insurance aggregator website rose 70% in May compared with March. Insurers did not reveal how many plans they sold citing business confidentiality, but many said it was in the "high thousands".

Demand for protection products by the under-35 age group since the pandemic first struck India, around 15 months ago. Industry executives say enquiries about insurance plans have rocketed despite the second wave of infections subsiding, probably due to strong prospects of a third wave given the slow start India made to the mammoth task of vaccinating its people. 

Behavior Change - Despite the lack of firm numbers on growth in the life insurance market, industry analysts see behavior changing among middle class families in a country that has traditionally seen poor levels of coverage. After clothes, food and home, insurance has now become the fourth pillar for a middle class family. 

Life insurance penetration - among India's population stood at 2.82% in 2019, compared with 2.15% in 2001, the latest annual report from the Insurance Regulatory and Development Authority showed. That is still well down from a global average of 3.35% in 2019, but then a large section of India's 1.35 billion people lack disposable income to set aside for insurance, a situation made even more acute by the economic fallout from the pandemic. 

Term insurance plans are popular in India because they are often cheaper and pay the family if the insured dies within the policy's payment period, though there is no maturity benefit if they outlive the plan. Demand for other kinds of insurance, including various medical cover, has also risen.

Life Insurance - Options When You Are Alive

Most people assume that a life insurance policy only pays out a settlement when the policyholder dies. Then again, most people in Western cultures don’t talk about death and are even less likely to plan for it. Nevertheless, you can use your life insurance in many ways whilst you’re still alive.

5 Ways to Use and Sell Life Insurance Policy - Depending on your current circumstances and health, you might need cash and sometimes life settlements are the only option. The good news is that you can easily tap into the cash value of your policy without necessarily having to sell life insurance policy, as described below:

A: Loans - Borrowing money and using the cash value of your policy as a collateral is a very common approach when trying to work out what to do with your universal life insurance. You can even borrow up to 90% of the cash value which could be in the tens of thousands or even millions of dollars. Some companies will only allow you to borrow up to the accumulated cash value though so it’s worth checking the rules. Although you should also note that this will impact the final death benefit payout.

B: Withdrawals - Some life insurance policies allow you to make withdrawals by adjusting your policy terms. Again, this assumes that you have accumulated some cash payments. Either way, it’s worth talking to your policy provider to see what’s possible before you even consider selling a life insurance policy. You might be surprised at how useful it is for you and your family today.

C: Surrender - Sadly, there’s still a lot of unknowns around life insurance. This means that when people find themselves unable to pay the premiums, they simply cancel without knowing what other options they have. Of course, surrounding your policy might be what’s best for you and your situation. If that’s the case then it essentially means that you cancel the policy with your provider. They then release all the cash value at that moment in time. Although, bear in mind that this is always going to be less than if you choose to sell life insurance policy.

D: Apply for Living Benefits - Depending on your policy, you could be eligible for a cash payout of up to 50% of the death payout if you meet certain criteria. These usually include chronic or terminal illnesses or even the need for long-term special care. Again, this could be the extra helping hand you need before deciding to sell a life insurance policy.

E: Sell Life Insurance Policy - Once you’ve explored all the other options, then a viable option might be to sell your life insurance. Of course, you should consider how this might impact your family. Either way, it’s a better strategy than surrounding your policy. The idea is that you sell your final death payout for a sum less than that but greater than your surrender value. You’ll have to work with a broker to negotiate the deal with a life settlement company that specializes in buying these types of insurances.

FWD Seeks Listing At USA

FWD, through its holding company PCGI Intermediate, is working towards an initial public offering in the US, which could see the pan-Asian insurer raise up to US$3 billion. In a statement, PCGI Intermediate announced that it had confidentially submitted a draft registration statement on Form F-1 with the US Securities and Exchange Commission (SEC). However, it did not state the timing and the value of the IPO.

FWD is considering an IPO in the US or Singapore, and it aims to raise up to US$3 billion, while keeping its dual-class shareholding structure. The insurer, which is backed by Hong Kong billionaire Richard Li, is also reportedly considering getting listed in the US through a merger with a special purpose acquisition company (SPAC).

FWD came into existence in 2013, after Li’s Pacific Century Group acquired Dutch financial services group ING’s insurance businesses in Hong Kong, Macau and Thailand. It is now present in 10 markets across Asia, having added Cambodia, Indonesia, Japan, Malaysia, the Philippines, Singapore and Vietnam.

According to FWD’s website, it has over 9.8 million customers, 6,100 employees and 33,000 agents across Asia, with US$62.6 billion in assets. Its offerings include life and medical insurance, general insurance, employee benefits, Shariah and family takaful products.

Health & Fitness Apps - Data At Risk

Health and fitness apps, which help mobile-phone users track everything from calorie intake to menstruation dates, can access and share personal data in a way that’s concerning.

The analysis of more than 20,000 apps found that inadequate privacy disclosures for many of them prevented users from making informed choices about their data. One third could collect user email addresses and many more transmitted data to third parties such as advertisers.

The findings come as the pandemic further boosts mobile-phone use and technology companies try to balance privacy demands with the financial needs of developers and advertisers. Google said it would create a new safety section in its Play mobile-app store, while Apple Inc debuted an anti-tracking feature this year.

The sensitive nature of the information users share on health apps – such as health conditions or disease symptoms – poses heightened privacy risks.

Yet among the health apps included in the study, 28% didn’t offer any privacy policy text. And at least a quarter of user-data transmissions breached what was set out in the policies offered. As many as 88% of the apps reviewed could access and potentially share personal information.

The study looked at over 15,000 free health apps in the Google Play store and compared their privacy practices to those of more than 8,000 non-health apps. The authors said the research was currently only an observational finding, and had some limitations, though they said it was a broad assessment of the apps compared with previous research.

MCA (CPRICM) - Assist Insurance Customer

The MCA Civil Society Movement Bureau has set up a non-governmental organization to seek justice for unfairly treated insurance claimants. The Campaign To Protect The Right Of Insurance Consumers of Malaysia (CPRICM) was set up after receiving appeals from over 30 insurance policyholders for help.

Many Malaysian suffered unfair treatment by the insurance companies who terminated their life and medical policies at a time when they and their families needed the protection the most. Most of the cases involved those undergoing life-saving treatment but we left in a quandary after being told that their policies were rejected for breaching the medical history disclosure clause.

CPRICM aims to create better awareness among consumers as to their rights as insurance policyholders while seeking a review of certain practices by the insurance industry. Among them, was the medical history disclosure clause involving some 140 items.

Most insurance agents fail to properly advise their clients resulting in problems cropping up only after the insurance policies are purchased. CPRICM also would like to invite the top management of insurance companies and Bank Negara to dialogue to try and settle the disputes amicably on some policy matters.

Those who have been unfairly treated by their insurance companies to contact the CPRICM secretariat at 011-1093 3109.

Insurance Claim - Missing Person

Many people goes missing each year in natural disasters - cyclones, incessant rains, landslides etc. Claiming insurance for a missing person can be slightly tricky as it is uncertain whether the person is dead or alive.

If the missing person is the breadwinner and has a life insurance policy, the family can get financial support by claiming life insurance. But how does one go about 'declaring' a missing person dead to initiate a life insurance claim?

A family submits the death certification with other documents to claim the insurance amount in the usual process. But in the case of a missing person, there is no death certificate. However, there's a law where a missing person can be presumed dead.

Every nation has the Evidence Act, Section 108 (or equivalent), where presumptions of death can be made after seven years of filing the FIR (first information report). To claim life insurance of a missing person, the family must wait for seven years before the insurance company can give them the claim money.

Once a person goes missing, the family members need to pay the premium and continue the policy else the policy could lapse, especially a term plan.

The family will first need to obtain a death certificate. Then, approach the court. The court will release the order to the insurance company. Along with the court order, the legal heirs will also need to submit a copy of the FIR and a non-traceable report by the police.

Sometimes the insurance company can settle a claim for a missing person before seven years. If there's reasonable proof of loss and there are clear circumstances for the occurrence of death. However, in the case of natural calamities, insurance would not settle claims as there's no incidental proof of death.

Since there is no incidental proof of the loss for missing cases due to natural calamities like floods, earthquakes, drought, etc.; it becomes very difficult to release the claims before seven years. But if the government releases a list of missing persons assumed dead, the insurance company would pay the claim without waiting for seven years.

Lower Returns On Sales Proposal (Singapore)

From July (2021), when life insurers in Singapore do policy illustrations for Singapore-dollar denominated participating policies, they will have to abide by lower caps of illustrative investment returns. The aim of the change is to provide consumers with a more realistic range of projected investment returns and will not affect the actual returns of existing and future participating policies, the Life Insurance Association (LIA) said on Wednesday (June 2).

The upper illustration rate will be capped at 4.25 per cent a year, down from 4.75 per cent, and the lower illustration rate will be capped at 3 per cent a year, down from 3.25 per cent.
As these are caps, the general rule for insurers is that the lower illustration rate must be at least 1.25 percentage points a year below the upper illustration rate.

Life insurers are expected to illustrate these scenarios to provide consumers with a reasonable potential range of the level of benefits. The downward revision of the caps was made "primarily in consideration of the sustained low interest rate environment. The objective in doing so is to provide consumers a more realistic range of projected investment returns so individuals can make better informed financial decision.

Consumers are reminded that these upper and lower illustration rates are for illustrative purposes only. We strongly encourage individuals to engage with their financial advisers to decide on policies aligned with their personal needs and risk profile. The actual returns received from a participating policy will depend on the actual experience - including investment performance - of the participating fund that will develop over the lifetime of the policy.

Actual investment returns in the future depend on future economic conditions, actual asset class returns, and asset allocation of the participating fund. Eventual actual returns received by policyholders may be higher or lower than those reflected within the policy illustration.

The Monetary Authority of Singapore has been informed of the downward revision to the caps, LIA said.

The last revision of caps on illustrative investment returns used in policy illustrations was in 2013, when the upper illustration rate cap was reduced from 5.25 per cent to 4.75 per cent a year. The lower illustration rate was set to be at least 1.5 percentage points lower than the upper rate.

The practice of having such illustration caps began in 1994. LIA said it reviews these caps annually "to ensure its ongoing relevance and appropriateness, considering recent and potential future economic market dynamics".

The annual review factors in any changes to the long-term outlook of economic markets, to determine if the caps still reflect a realistic range of projected investment returns going forward. The association said it will revise the caps "when the realistic range of projected investment returns have shifted materially".

IFG Seeks Additional Fund

Asuransi Jiwa IFG (or IFG Life) is seeking additional funds following the commencement last month of operations that include taking over the restructured portfolio of the financially stricken state-owned life insurer, Jiwasraya. The move is to ensure that IFG Life will be financially healthy.

IFG Life will obtain the additional funds through fundraising or fresh capital injections through additional state capital participation (PMN) in 2022. IFG Life president commissioner Pantro Pander Silitonga said the company's main target this year is to complete the migration of Jiwasraya's business portfolio to IFG Life. This task itself requires significant funding.

IDR30tn ($2.1bn) to IDR35tn is required for the portfolio transfer and PMN of IDR22tn, there is still a shortfall of IDR13tn. IFG Life is looking at various sources of funding that include the sale of assets of Jiwasraya that would raise around IDR12tn. The company also plans to conduct additional fundraising of around IDR4-5tn. Additional PMN in 2022 to be around IDR2tn when the migration is complete.

Jiwasraya, which defaulted on payouts to customers, had suffered three fundamental problems. 

First, solvency and liquidity problems had been present for a long time but were not resolved. Instead, there was window dressing of financial statements. Liquidity issues arose because the company had sold savings-type insurance products that carried guaranteed high interest rates.

Second, Jiwasraya had weak corporate governance and engaged in risky investment activities. There were no guidelines on curbing investments in high-risk assets. 

Third, customer confidence declined accompanied by increased withdrawals or payouts and lower sales. There were not enough assets to meet liabilities.