Podcast
Questions and Answers
What is the maximum premium amount an individual can claim for life insurance related to the Employees Provident Fund?
What is the maximum premium amount an individual can claim for life insurance related to the Employees Provident Fund?
Which entity administers the Employees’ Social Security Act 1969?
Which entity administers the Employees’ Social Security Act 1969?
How does SOCSO primarily support lower-income employees?
How does SOCSO primarily support lower-income employees?
Under the Employees Provident Fund, what is the maximum voluntary contribution amount recommended for commission-based personnel?
Under the Employees Provident Fund, what is the maximum voluntary contribution amount recommended for commission-based personnel?
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Which of the following insurance plans is specifically mentioned as being covered by OSHA?
Which of the following insurance plans is specifically mentioned as being covered by OSHA?
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What is a primary disadvantage of using press conferences for product promotion?
What is a primary disadvantage of using press conferences for product promotion?
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Which method of promotion is described as being primarily passive with limited market exposure?
Which method of promotion is described as being primarily passive with limited market exposure?
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How do human resources contribute to the insurance industry's outreach?
How do human resources contribute to the insurance industry's outreach?
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Which of the following promotional methods is recognized for good company branding but unsuitable for direct product branding?
Which of the following promotional methods is recognized for good company branding but unsuitable for direct product branding?
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What limitation is associated with direct mail to existing policyholders?
What limitation is associated with direct mail to existing policyholders?
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Study Notes
Promotion Methods
- Direct mail can be a low-cost promotion method for existing policyholders, but it is impersonal.
- Booths in malls or fairs offer an interactive experience, but they require a significant investment in human resources.
- Charity work can be a good way to increase corporate branding, but it is not appropriate for product branding.
- Press conferences and releases allow for access to journalists, but publicity might be misguided or misinformed.
- Sponsoring industry events can increase brand positioning, but it is not always effective for product promotion.
- Open days during events like festivals are a good way to increase brand positioning, but have limited market exposure.
Human Resources
- Human resources are essential for the insurance industry's value chain.
- The sales force heavily relies on the individuals involved in the multichannel sales process.
- The value chain encompasses employees from product development to sales and claims handling.
The Employees Provident Fund (EPF)
- Established by the Employees Provident Fund Act 1991, replacing the 1951 Act.
- Applies to employees, not commission-based sales personnel.
- Offers tax relief for life insurance premiums up to RM6,000 per year.
- Provides tax relief for education and medical insurance premiums up to RM3,000 per year.
- Offers tax relief for annuities with premiums up to RM3,000 per year.
- Encourages commission-based personnel to contribute to the EPF with a maximum of RM100,000 per year.
The Social Security Organization (SOCSO)
- Administers the Employees’ Social Security Act 1969 and its related regulations.
- Provides social security protection through social insurance, including medical and cash benefits.
- Offers artificial aids and rehabilitation for employees.
- Aims to reduce employee suffering and provide financial security for families.
- Primarily targets lower-income employees with contributions deducted directly from salaries.
- Allows employees to file claims for hospitalisation, death, and temporary or permanent disabilities.
The Occupational Safety and Health Act 1994 (OSHA)
- Primarily relevant to general insurance, particularly plans covering workers like "Workmen Compensation".
- Provides principles and guidelines for claims handling and interactions with claimants.
- Emphasises customer-focused claims philosophy, including fairness, transparency, and personal interactions.
Claims
- Insurance companies should prioritize clear goals and desired market perception for the claims process.
- Some prioritize reducing leakage through fraud prevention, while others actively pursue claim payouts.
- All insurance companies must prioritize customer service, adhering to the Fair Treatment of Financial Consumers (FTFC) policy.
Fair Treatment of Financial Consumers (FTFC)
- Introduced in May 2020, aiming for fair and effective handling of consumer complaints and claims.
- Requires Financial Service Providers (FSP) to focus on core service values and behaviors.
- Emphasizes internal commitments that deliver external outcomes for customers and policyholders.
Legal and Compliance
- The legal and compliance departments, often separate, work closely to ensure compliance with regulations.
- The heavily regulated insurance industry necessitates adherence to legal and regulatory frameworks.
- The legal and compliance departments play a critical role in every insurance company to ensure compliance.
Legal Department
- Ensures all company actions adhere to national laws.
- Drafts and reviews various contracts, including those with business partners and financial arrangements.
- Reviews reinsurance agreements, intellectual property issues, sales agreements, sales materials, and legal changes.
- Resolves disputes and litigation matters.
Compliance Department
- Examines financial reports and audits internal control systems.
- Evaluates compliance with policies, procedures, and business practices within legal and regulatory frameworks.
- Reviews operations and campaigns for alignment with objectives and planned execution.
- Investigates reported instances of fraud, embezzlement, theft, waste, and misconduct.
Internal Audit
- Ensures objectivity and independence to maintain effectiveness.
- Reports to the CEO and the Board of Directors, providing regular updates on audit plans, results, and significant findings.
- Enjoys direct access to the CEO and the Board for immediate attention to pressing matters.
Strategic Planning
- Large insurance companies often have dedicated strategic planning departments.
- The department oversees the strategic planning process, from drafting to execution.
- Aligns strategies with the Board of Directors and the CEO.
- Designs and presents the strategic plan to the Board for approval.
- Cascades the plan to management and staff.
- Monitors implementation progress and adjusts plans based on feedback.
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