Policyholder Wins Claim Against Great Eastern

The High Court here has recorded a consent judgment between a 42-year-old cancer patient and an insurance company in a RM2.5mil lawsuit she filed against the latter. In the judgment recorded before Judicial Commissioner Liza Chan Sow Keng here on Monday (March 29), businesswoman Tan Siew Wei and Great Eastern Life Assurance (Malaysia) Bhd achieved a full and final settlement in one of the two insurance policies she is claiming for.

In the settlement, a sum of RM500,000 was to be paid by the defendant to Tan as a full and final settlement of all the claims and demands which Tan has against the defendant, in respect to the particular policy.

Tan, who was diagnosed with Stage 4 cervical cancer in 2019, had sued the company for rejecting her critical illness insurance claims on allegations that she had broken the policy clause with a non-disclosure on her mental state, where she was diagnosed with an anxiety attack in February, 2017.

She is suing the company to claim for RM500,000, which is the basic sum assured from the first life insurance policy, and another RM2mil, the basic sum assured from her second life insurance policy.

The court ordered for the settlement sum to be paid before April 1 and did not make any order as to costs. Neither party would have any further claim against the other after the settlement is completed. The policy shall be terminated with all the benefits and rights provided under the policy to cease. 

Sun Life - Google Growth

Sun Life surveyed 1,600 insurance agents and advisors from various insurance carriers in Hong Kong, Indonesia, Malaysia, the Philippines, and Vietnam between August and September 2020.

Optimistic - insurance advisors in Asia are generally positive about the economy and the life insurance industry, despite the impact of the COVID-19 pandemic. More than half (56%) are optimistic about the outlook of their country’s economy, while seven in 10 (70%) believe things will be better for the life insurance industry and their abilities to grow insurance sales in 2021. However, many also believe that the current environment of restricted face-to-face interactions will remain for quite some time. The study also found that health concerns are now top of mind, with 79% of advisors expecting higher sales of medical products and 77% expecting growth in critical illness insurance sales.

Digital Drive - another major finding was the pandemic is driving advisors to further embrace digital technology. A majority of respondents (59%) strongly believe they will use both digital and non-digital tools to communicate with clients in the future. The pandemic has also pushed advisors to look at new ways to prospect for clients and to use social media to promote themselves.

Across all markets surveyed, agents expect to operate in a physically distanced environment for at least another year, which means they will need additional support from insurers to help augment traditional sales and communications tactics.

Google - Sun Life announced it has partnered with Google to offer an integrated productivity solution to its advisors across Asia. According to Sun Life, using Workspace products including Gmail, Docs, Sheets, Slides, Forms, Calendar, Chat and Meet, will allow its advisors to communicate more easily with clients, automate tasks and work from anywhere. This, the insurer said, will give advisors more time to meet their clients’ needs.

AIA & Bank Of East Asia

AIA Group is nearing a deal to buy the life insurance unit of Bank of East Asia, the Hong Kong-based lender whose shareholders include American billionaire hedge fund manager Paul Singer's Elliott Management Corp. The insurance giant has emerged as the likely buyer for the assets. A deal could be valued at about US$600 million (S$807.6 million) to US$700 million.

A sale would be part of Bank of East Asia's efforts to boost profitability and lift its shares. The lender in September last year kicked off a process of divesting its life insurance unit and had attracted bidders including China Strategic Holdings, an investment firm backed by billionaire Henry Cheng. As part of the sale, the Hong Kong lender will also seek a long-term exclusive distribution agreement that could provide an ongoing source of revenue.

Bank of East Asia is one of the few remaining family-run banks in Hong Kong as the local lenders have been squeezed by larger competitors like HSBC Holdings and Bank of China. In 2009, China Merchants Bank bought Wing Lung Bank for about HK$17 billion (S$2.95 billion), while state-backed Yue Xiu Group completed acquiring a majority stake in Chong Hing Bank in 2014.

BEA Life, the bank's wholly-owned life insurance arm, grew its new premium income from whole life and annuity products by 9.5 times in 2020 from a year ago, according to the bank's latest financial report. That drove an 83 per cent increase in BEA's commission income from sales of life products.

Insurance Scam - Prudential India

India Government informed the Parliament on Tuesday (March 23, 2021) that the Insurance Regulatory and Development Authority of India (IRDAI) has reported receipt of 316 complaints from 250 policyholders in the last seven years alleging mis-selling of insurance products by some salespersons of ICICI Bank and ICICI Prudential Life Insurance Company.

The Reserve Bank of India (RBI) has also reported receipt of one complaint alleging the issue of insurance policy in place of Fixed Deposit. Government's reply came in response to a question on “whether Government is aware of complaints of fraud against ICICI Bank and ICICI Prudential for issuing life insurance policies to poor farmers in the garb of fixed deposits".

IRDAI has informed that the complaints were taken up and the ICICI Prudential Life Insurance Company has reported resolution of all 316 complaints. The insurance company has refunded an amount of Rs 2,93,62,385 in 254 cases while declining refund in 23 cases. Other actions taken by the insurance company for the resolution of the complaints also included the change of product in remaining cases.

In the case of selling of Fixed Deposit in lieu of insurance policy - RBI has reported regarding the complaint received that the premium amount of Rs 2,00,000/- received from the customer was refunded by the ICICI Prudential Life Insurance Company.

Singapore Largest Scam S$1 Billion

A businessman charged on Monday (March 22) has been linked to an alleged fraud involving at least $1 billion, the largest in Singapore's history. Ng Yu Zhi, 33, is the director of two firms and said to have raised the money from investors, purportedly to finance nickel trading.

The alleged victims were promised varying returns averaging 15 per cent over three months. But the nickel trades never took place and the investors are still owed the money. Ng, the director of Envy Asset Management (EAM) and Envy Global Trading, was charged with two counts of cheating and two of being a party to fraudulent trading involving about $48 million.

Life Insurance Claim Rejected - Due To Bad Faith

Self-employed woman contracts cancer. Claims under her income-protection insurance policy. Insurer cancels the policy after investigation reveals omission of unrelated health condition (depression) on her original application. She is accused of acting in bad faith and threatened with having to repay the money (A$24,000) already received. Her story comes to national attention. A dramatic court battle ensues. Justice is finally served.

Last week - in Federal Court, Chief Justice James Allsop found TAL Life, one of Australia’s biggest life insurers, had breached its duty to act with "utmost good faith" by cancelling a sick woman’s income-protection policy through the questionable practice of “retrospective underwriting”.

The Federal Court case was initiated by the Australian Securities and Investments Commission in December 2019. This followed evidence from the banking royal commission in 2018 showing the lengths TAL went to in seeking to void insurance policies.

Justice Allsop ruled TAL’s actions – including not informing the claimant she was under investigation, reaching a wrong conclusion, failing to give her a chance to respond, and threatening to pursue her for money – lacked "decency and fairness". 

The ruling carries no financial penalty, apart from TAL having to keep its end of the contract. The judgment is nonetheless significant. It puts insurance companies on notice about the use of retrospective underwriting, scrutinising insurance applications only when a claim is made, and covertly trawling through applicants’ medical and financial records to find any excuse to void the policy.

What is underwriting - Let’s briefly recap what insurance underwriting means. It is the process of assessing an applicant’s risk and pricing a life insurance policy (which includes a policy such as income protection) accordingly.

If you have, for example, a history of hypertension, you have a higher risk of stroke. This is something an underwriter wants to know, to accurately assess your actuarial risk. They may increase the premium you pay, or exclude from the policy claims for strokes, or decline cover altogether.

Insurance application forms typically require you to declare “yes” or “no” to a list of the most common medical conditions or circumstances, with an open-ended question about other “relevant” conditions.

Usually the underwriting process is straightforward. Insurers accept declarations in good faith, and approve applications (and collect the premiums) as quickly as possible.
Retrospective underwriting

But that changes when you make a claim - Then insurers are unwilling to accept anything in good faith. They typically require you to authorise access to your financial and medical records, including records you may not have seen – such as your doctor’s notes.

A doctor might note observations about a patient seeming depressed. It’s not an explicit diagnosis. But an insurer may retrospectively consider this undisclosed evidence of “depression”.

Finding “relevant” information not declared in the original application gives the insurer an excuse to “retrospectively underwrite” the policy – determining what policy it would have offered (if at all) had that information been known.

Retrospective underwriting usually favours insurers as it is done with the knowledge of an existing claim. The federal Insurance Contracts ACt allows insurers, under certain conditions, to cancel policies within three years of inception due to relevant non-disclosures or misrepresentations in applications.

Practical implications - It is not unusual for insurers to use a claims process to retrospectively underwrite. Often claimants only become aware of this when they’re told there is information giving the insurer the right to cancel the policy. Under the life insurance industry’s voluntary Code if Practice, isurers are meant to explain why they’re requesting information relevant to a claim.

The corporate regulator and consumer advocates have long held concers the three-year window to cancel policies encourages insurers to go on “fishing expeditions”.

No more spying - Since January 1 the rules giving insurers three years to cancel a policy have been tightened – from the banking royal commission the federal government has implemented. 

Insurers now may only “avoid a contract of life insurance on the basis of non-disclosure or misrepresentation if it can show that it would not have entered into a contract on any terms”.

The Federal Court ruling puts life insurers on further notice. It clarifies what the “duty of utmost good faith” required by the Insurance Contracts Act means.

They don’t need to behave dishonestly to breach that duty. Not meeting community expectations of decency and fairness is enough. That doesn’t leave much room for lesser signs of excessive suspicion, let alone “deep-dive” operations to dig for dirt. That’s all but been declared illegal.

Ouch Secures RM1.5 Million Funding

Malaysia-based insur-tech player, OUCH! , announced a successful US$364,600 (RM1.5 million) seed funding round from Vynn Capital and Temokin, along with a few unnamed angel investors. With the funding, the Ouch! team will focus on further product and business development and to prepare a stronger foundation for growth. 

Its efforts going forward will be directed towards improving the platform and service for users, as well as rolling out more features and upgrades to the platform across 2021. “Ouch! is very honoured to have gained support from such prestigious investors who have placed their immense trust in us,” said Shazy Noorazman (pic), chief executive officer (CEO) of Ouch!.

“This funding will allow us to build upon our current infrastructure and roll out more features to our customers for an even more holistic experience.”Shazy said with Ouch!, insurance can be more accessible now and customers can gain more confidence in insurance to protect their assets and their future instead of being intimidated by it.

Founded in September 2019, Ouch! is aimed at making insurance purchasing process simpler and fuss-free.Shazy noted that its research has shown that many people, especially youth and fresh graduates, are intimidated by the complicated terms and policies when purchasing insurance.

“Something as essential as insurance should not be confusing and should be as simple and straightforward as possible lest we turn off customers from one of the most necessary purchases in life.

“The experience should be as pain-free as possible, which also happens to be our tagline,” he said.According to Shazy, the platform features a simple interface, allowing customers to easily choose from five insurance categories, namely medical, life, travel, motor and home.The insurance options come from Allianz, AXA and Etiqa. Getting a quote for their insurance plans can be done within five minutes, the startup claimed.

Ouch! also pointed out that the platform deliberately utilises simple, easy-to-understand language to reduce confusion and to make things easier for first-time purchasers and those unfamiliar with insurance terms.The insurance platform also features a comprehensive policy vault for easy referencing and safekeeping.The company is slated to revamp its app in April and have plans to introduce “something big in the future.” 

It also has plans to raise a pre-Series A funding later in 2021, noted Shazy.