Blame All On Tun Mahatir

Can we have sincerity in the Proton debate? Leaving politics aside, I think the whole debate over the future of Proton and the National Automobile Policy (NAP) is filled with baloney and hot air.

Tun Dr Mahathir Mohamad resigned as the Prime Minister in October, 2003. If indeed the government was sincere in fixing the problems in Proton, why was he appointed Proton chairman as recently as May 2014? Now, with his resignation a few days ago, cabinet ministers are suddenly wiser on Proton and the NAP.

Before this, most ministers were blind and deaf in supporting a company with no ability to compete and pursued a national policy that has caused misery to a generation of car users in the country. What is the point of talking about the issue now when a generation has been deprived of a better car at half the price, all because of our intransigence and false sense of national pride?

Suddenly everything is Mahathir’s fault.

A day after his resignation, MITI minister Mustapa Mohamed, came up with a “comprehensive paper” on Proton and NAP. With due respect, nothing mentioned in the minister’s paper was new. This was what most Malaysians have been raising for years but it had fallen on deaf ears.

“Horror stories of non-executive chairman’s direct interference and ‘dictatorial leadership style’ in Proton are slowly emerging. Shocking!” Datuk Seri Abdul Rahman Dahlan tweeted on Saturday.

“Proton’s shareholders and BOD (board of directors) must be brave to tackle any legacy problems left by the ex-chairman. In other words, Proton must be serious & not be afraid to unshackle the culture of ‘deaf, dumb & blind’ in Proton,” the local government, housing and urban wellbeing minister said in successive tweets.

Rural and Regional Development Minister Ismail Sabri Yaakob, the minister who wants to set up digital malls all over the country, was talking about rational economics, the downside of interference and the need for Proton to have strategic partners, market size and profits.

But why didn’t they think of all these before the government appointed Mahathir as chairman of Proton? Similarly, why didn’t they think about it before his resignation recently?

For years we have been pursuing a policy that is unsustainable, unrealistic and supporting a company that we think can defy the law of gravity. We tolerated inefficiency and subsidies and exploited Malaysian car users to the hilt. In the process we lost the opportunity to become the auto hub of Asean which could have attracted billions of foreign investment and generated thousands of higher value-added jobs. Our intransigence and hubris have become Thailand’s opportunity.

Suddenly our cabinet ministers have become smarter. Now they are talking economics, market, efficiency, prudence, and the downside of subsidy. I just wish that it is true this time.

Article by: T K Chua (source FMT)

SOCSO Covers All

The Employees’ Social Security (Amendment) Bill 2015 which is aimed at extending social security protection coverage to all employees was tabled for second reading at the Dewan Rakyat today.

Human Resource Minister Datuk Seri Dr Richard Riot, who tabled the bill said it contained 12 clauses involving eight sections, whether amended or added with new provisions aimed at improving the capacity of the Social Security Organisation (Socso).

 “Among the amendments proposed in the bill include a provision for all employees to be insured, regardless of the amount of their salaries but subject to a ceiling contribution and benefit of RM4,000.

“The proposed amendments also include Socso coverage for self-employed and gave the organisation the authority to implement whatever schemes to protect employees who lost their employment,” he said.

Also proposed was an amendment to remove the representative of Bank Negara from the Socso Investment Panel to prevent conflict of interest when the organisation was dealing in a matter which involved the authority of Bank Negara.

Riot said there were 63,331 accident cases involving 933 deaths at the workplace in 2014, while last year the figure was 62,463 accidents with 1,000 deaths. According to him, road accidents involving workers to-and-fro work were showing a worrying trend and should be given social protection and it should be extended to cover employees nationwide.

 “The proposal is a manifestation of the government caring for the welfare of employees in the country and it is expected to give benefit directly, in the form of interest value protection through Socso, to an additional half a million employees.

 “This will increase the Socso coverage from six million employees now to 6.5 million employees (after the amendments have been passed).”

The bill was later debated by several members of parliament who generally agreed with the proposed amendments but wanted further improvements. Normala Abdul Samad (BN-Pasir Gudang) said the proposal to remove the Bank Negara representative from the Socso Investment Panel should be reviewed as the move might not bring good perception to the organisation. Idris Ahmad (PAS-Bukit Gantang) concurred with Normala that the Bank Negara representative should be retained in Socso’s investment panel to look after the accountability of the employees’ organisation.

He also proposed that a Syariah advisor be placed as a member of the Socso Investment Panel to monitor the halal status of investment activities as most contributors were Muslims. Datuk Seri Abdul Azeez Abdul Rahim (BN-Baling) proposed Socso review the employee insurance coverage on the journey to-and-fro work which was sometimes seen as not in favour of the employee.

“Imagine, if I were to work in Sungai Way and was returning to Subang Jaya but there was an emergency on the way back in Kuala Lumpur so I detoured to Kuala Lumpur, and on the way I met with an accident. “But at Socso, they cannot pay me as I was out of the Socso radar. This is among the issues which need to be reviewed,” he said.

High Risk = High Premium

Come 2017, motor insurance rates will be based on a list of risk factors, instead of the current pricing policy - a move that now means drivers will have to pay insurance premium rates based on how much risk they are perceived to carry.

Among the risk factors that would be considered include location of residence, vehicle make and model, use of vehicle, occupation of owner, history of claims, gender and age.

For instance, owners and models with high repair costs, owners of high performance vehicles, owners with a fewer years of driving experiences or those who live in crime-prone areas may have to pay higher premiums.

The rates offered however will not be regulated and may vary across different insurance providers.
The change in how one’s car is to be insured – confirmed by Bank Negara in its Financial Stability and Payment Systems Report 2015, released yesterday – is part of the liberalisation of motor insurance tariffs in Malaysia.

 

The move to liberalise the motor insurance market is expected to provide greater pricing flexibility between insurance providers, which will promote competition 

  between them.

Consumers will largely benefit from this open market, with insurers competing to offer better coverage, services and of course, pricing. More streamlined practices will also minimise delays in claims settlements.

While the liberalisation of tariffs will begin July 1 of this year, it will be carried out in stages “to minimise the move’s impact to both consumers and insurers”.

The first phase will enable the industry to offer “new products” and optional add-on covers at market rates. These include additional policies to cover engine hydro-locks, lost car key replacement, and so on.

Prices of these new products will not be regulated and will be determined by the market where insurance providers will be allowed to fix prices as they see fit to attract consumers.

The second phase is where risk-based assessments will be introduced and rates determined by the market apart from the dis-application of tariff rates for comprehensive and third party motor insurance.

Enhancements to consumer protection will also be introduced to ensure proper governance over product design and pricing. Insurers are expected to assess the risks appropriately and consistently for fair treatment of consumers.

The standard scope of coverage disclosure will also be increased, making it easier for consumers to compare insurers.

Consumers , according to the report, will also be open to customise coverage limits or purchase optional extensions as they please.

Making A Claim From Insurer

When I consider insurance, I think about it as a bet I don’t want to win. If I use my disability insurance, it means I’m hurt. If I file anauto insurance claim, it means I had a car accident. When I pull out my insurance card at the doctor’s office, I’m sick. And when my husband or kids start looking for my life insurance policy, it will mean I’m no longer here.

None of these outcomes is desirable, but I carry insurance in case they happen. It’s comforting to know that an insurance company, rather than my family, will be responsible for the related financial risks.

Getting your money

What’s unnerving, however, is how hard it can be to get the money an insurance company owes you when you do make a claim. I’ve encountered situations in which the insurance company delays or denies payments to the insured. This can be true for many different types of insurance, whether it’s health, auto, long-term care,disability, life or some other kind.
 

Although most insurance agents and companies provide fair, speedy and excellent service, some may drag their feet on paying claims. Some may even be unscrupulous in their dealings with you. In one case, an insurance agent tried to sell my client mortgage insurance even though a mortgage insurance payout was being made to pay off the mortgage entirely. In other instances, I’ve seen medical claims erroneously denied until an extensive appeal finally corrected the health insurer’s ruling.

To minimize the chances of your insurance company delaying or denying your claim, know the rules specified in your insurance contract and be ready to provide documentation — sometimes repeatedly — to support your claim. Such information may include account numbers, proof of identity, original death certificates (not copies) and powers of attorney.
 

Also be aware that many insurance companies provide contracts online and don’t mail hard copies to their customers. But passwords can be forgotten — or lost, if their owner dies — and companies can go out of business, change hands or close online access. Make sure you secure your contract before you need it. Save a copy on your computer and print out and file hard copies in a safe place such as a designated file cabinet or safe deposit box. Make sure your family knows how to access your storage place.
 

What you need

If you need to make a claim, the first step is to contact your insurer. In most cases you will need to provide:

• The policy or contract that shows what kind of payment has been purchased and that you are the claimant, policyholder or beneficiary.
• Proof of identity, which includes things such as your Social Security card, marriage certificate, driver’s license, passport, birth certificate and pay stubs.

The insurance company will issue affidavit requests, beneficiary claim forms, identity verifications, address certifications and other forms you might need. Carefully and accurately complete these documents — and get them notarized, if required — to avoid delays in receiving your money.

 

Once you submit the necessary forms, be prepared to follow up until your money is in your hands. You may need to write numerous emails and letters. You may need to make many calls in which you’ll be required to select among a dizzying number of departments, often only to be disconnected accidentally or directed to leave a voicemail.

Write down the names, phone numbers and email addresses of everyone you talk with and keep notes about the conversation. It can take months to complete a claim, and you can forget whom you talked with and what they said. Going back to your notes can prevent repetition and speed resolution of the matter.

An insurance payment isn’t a gift

As you try to get paid for the injury, illness, accident or other misfortune that caused you to file an insurance claim, don’t let delays and runarounds deter you. Remember, you are getting a product you paid for, not a gift. Insurance is something you buy or pay for with taxes — like workers’ compensation and Social Security benefits — to protect yourself or your assets. In some form or another, you’ve already paid for the money you’re requesting.
 

This is important to keep in mind as you start what can be a time-consuming and arduous process. Guilt can sometimes get in the way of your fortitude, but in truth you are asking for only what you bought, not for a freebie. Review your policy, looking at old statements to refresh your memory about how much you paid over the years for this reimbursement. Totaling 20 years of premiums or tax payments will help reduce any guilt you might feel in asking for payments due you. And knowing you paid for your coverage fair and square will help you persist.

As a glass-half-full, butter-side-up optimist, I’m confident that patience and perseverance will eventually result in you getting the money you’re owed.

 

Australian Insurers Swindle Customers

When an industry doesn't have a code of conduct, is granted exemptions from laws banning unfair terms in contracts and has the power to discriminate, it is little wonder that consumers end up the poorer.

This is certainly the case in the $44 billion life insurance industry, which has all these exemptions, and last month was caught abusing this privileged position. The requirement to act in "utmost good faith" has proved to be of little use to consumers who end up arguing their life insurance cases before the courts.

Commonwealth Bank's life insurance arm CommInsure apologised to customers that it had treated poorly and agreed to accelerate changes to its heart attack and rheumatoid arthritis definitions, albeit only backdating to May 2014, to bring it into line with medical advances.

It followed shocking revelations that some legitimate claims were being knocked back using definitions that were years out of date – definitions that certain key executives had been made aware of but had not been updated.

       

But CommInsure isn't the only life insurer flogging products with out-dated definitions that are then used to decline claims.

 

Faulty Products
In most sectors this would be deemed a faulty product or service and the manufacturer or service provider would be called on to fix or recall the product and cop a fine.

Yet when it comes to life insurance, which is purchased by consumers to give them peace of mind in case something terrible happens in their life such as illness or death, there is an explicit "carve out" of unfair contract terms laws written into the insurance legislation.

When the laws governing insurance were drafted in the 1980s, it was thought that there were enough consumer protections in the act, such as insurers' requirement to act in "utmost good faith" to protect consumers.

Between the unfair terms protections in the Australian Consumer Law and the ASIC Act, every contract that a consumer is ever likely to enter is protected by unfair terms law – except insurance.

Put simply, insurance has been allowed to fall through the cracks. Not surprisingly, the insurers, especially the life insurers, have fought tooth and nail to protect it.

Change Resisted
The previous Labor federal government flagged plans to pass laws extending the ban on unfair contract terms to general insurers. But the life insurance industry was spared this attempted reform, which failed to clear Parliament before the 2013 election.

The reason is simple. During a review of the laws in 2010, the life insurance industry's lobby group, the Financial Services Council (then known as the Investment and Financial Services Association) went into lobbying overdrive to maintain the "status quo", effectively launching a scare campaign that any changes would increase costs, which would be passed on to consumers. It also warned of increased litigation.

It boldly wrote: "[Life] insurance policies are not commonly a source of contract terms that could be said to be harsh and/or unfair to consumers."

Six years later, Fairfax Media and Four Corners' investigation has exposed CommInsure's use of outdated and unobtainable medical definitions in life insurance contracts.

Hidden Nasties
These definitions have disadvantaged many sick and dying consumers. CommInsure has since apologised to paid out those victims but what about the others who have been knocked back or have been waiting years for a response to their claims?

John Berrill, one of the country's leading life insurance lawyers, says one of the key problems with life insurance is the "hidden nasties" in the fine print of lengthy product disclosure statements.

He says other industries such as general insurance have a standard cover, which assumes terms in insurance policies are consistent with what most people understand they would be covered for or not. The life insurance industry doesn't.

It means the requirement to act in "utmost good faith" has proved to be of little use to consumers who end up arguing their life insurance cases before the courts.

It's why, David Leermakers, senior policy officer at the Consumer Action Law Centre, believes the exemption from laws banning unfair contract terms should end. The former ACCC chairman Allan Fels strongly agrees.

Too Important For Flaws
Life insurers, unlike general insurers, don't have an industry code of conduct – further eroding the protections for consumers of their products.

The industry is currently working on a code, but only after ASIC released a damning report in 2014 that found 37 per cent of advice on life insurance was in breach of the law. The industry was told to fix itself up.

But it beggars belief why a mandatory code wasn't imposed and exemptions removed.

The industry has been dogged with problems for years. In 1992 the then Trade Practices Commission conducted an investigation that found that "the market continues to deliver poor value for money to a high proportion of consumers, particularly in the regular premium sector of the market.

"The root causes of this market failure are the serious information problems facing consumers in this market and the misleading conduct of some agents."

Still privileged position
Despite this, life insurers hold the privileged position of being legally exempt from anti-discrimination laws, as long as they can back any discrimination with statistical and actuarial data.

Beyondblue chairman Jeff Kennett doesn't believe they have the data, yet they continue to discriminate. In a recent interview, he said beyondblue had been trying since 2002 to get the statistical data to understand why claims are being refused.

"They're collecting premiums, they know some of those premiums are going to result in claims. They know that they're going to rely on a clause of mental health where they don't have to pay up. It's unacceptable. It's discriminatory. It's hurtful because the damage isn't just about the money. It's the psychological damage they do to individuals taking on these big organisations."

Kennett believes the data should be subpoenaed, analysed and a report handed own. "From that I think you'll find the use of the words 'mental illness' within an insurance policy, life, income protection, tourism, travel – anything else – will be substantially changed."

Cabrini Medical Centre rheumatologist, Associate Professor Stephen Hall, has been battling issues surrounding insurance companies and his rheumatoid arthritis patients for 30 years.


He told Fairfax Media in March how insurers used 50-year-old actuarial tables that failed to account for medical advances; the result was the denial of claims based on "antiquated" medical definitions.
It all adds up to an extraordinarily light consumer protection regime for an industry that holds so much sway over people's lives in their most vulnerable moments.

"Pretty much everybody but the insurance industry agrees that these consumer protections for insurance are not up to the task – they don't do what they need to do," Leermakers says.

What Is AutoGen Club

It is a necessity nowadays to have insurance, be it life, medical or auto insurance. In the quest to become Malaysia’s most trusted insurance company, AmGeneral Insurance Berhad launched its exclusive AutoGen Club at its head office in Menara Shell on Wednesday.

The AutoGen club is an exclusive club that recognises the support, contributions and efforts of loyal car dealer partners. Currently, there are 45 potential partners on the list, with more invited to be part of this exclusivity.

Among the key benefits of the club are various privileges for partners such as obtaining fast claims, reimbursement of Internet fees, an enhanced motor underwriter guide as well as agency convention.

The Fast Claims Services will enable members of the AutoGen Club to obtain their claims quicker than the conventional agreed services on claims settlements.

To further mark AmGeneral Insurance’s milestone, the AutoGen Club announced a partnership with Opal Auto Mart Sdn Bhd as the exclusive underwriter for the auto warranty sold under Opal’s lifestyle programme.

The programme will cover both reconditioned and used cars. Opal is the largest extended warranty service provider and administrator for reconditioned and used cars.

With a network of more than 200 specialised workshops nationwide, all vehicles will be promptly checked, serviced and maintained by Opal’s professional panel of workshops nationwide.

“With these new initiatives in place, the AutoGen Club and Opal Auto Mart Partnership, we aim to solidify our position in motor and non-motor sales, making Malaysia a safer place by reducing vehicle breakdowns, and growing alternative business solutions for reconditioned and used cars,” said AmGeneral Insurance chief executive officer Derek Roberts.

Insurance Updates Malaysia

RAM Rating Services expects growth in the Malaysian insurance and takaful sectors to moderate in 2016 amid the challenging landscape and uncertainties in the financial markets.

The ratings agency said on Thursday against its GDP forecast of 4.4% for 2016, gross premiums were projected to expand about 5% for life insurance, 2%-3% for general insurance and 4%-5% for takaful contributions.

“Despite the likelihood of slower momentum in the near term, the industry’s mid to long-term outlook remains favourable given the low insurance penetration rate, rising consumer awareness and greater efforts in product innovation and distribution,” it said.

RAM Ratings said insurers and takaful operators’ capitalisation levels and reserves remained robust and the industry is supported by a sound and prudent regulatory framework. 

“Against this backdrop, we have maintained a stable outlook on the credit profiles of our rated insurers and takaful operators. 

“Over the next few years, the operating landscape will evolve with regulatory-driven liberalisation. The detariffication of motor and fire insurance – to be implemented in phases beginning this year – bodes well for the sector as premiums will gradually commensurate with underwriting,” it said. 

RAM Ratings said the life and family takaful sectors would see greater operational flexibility as initiatives under the Life Insurance and Family Takaful Framework were gradually implemented. 

It pointed out these reforms might result in some short-term uncertainty for insurers and takaful operators during the initial adjustment period but they would be positive for the long-term growth and efficiency of the industry. 

In 2015, insurers and takaful operators were not spared the fallout from slower economic growth and subdued consumer sentiment. 

To recap, gross premiums in the general insurance segment rose only 1.7% (2014: 6.5%) on-year to RM15bil. Life insurance premiums grew 5.4% (2014: 7.7%) to RM37.4bil. 

Although family takaful continued to expand at 8.0% (2014: 4.4%), growth in the general takaful segment eased to 6.0% (2014: 13.3%), ending the year with RM7.0bil and RM2.3bil of gross contributions, respectively. 

Overall, the sector’s profit ebbed 13.8% as benefits and claims as well as commissions and management expenses outpaced the increase in premiums/contributions and investment returns fell amid a volatile market.