INSURANCE INDUSTRY SUPERVISION

TOPIC 7
 Overview !
-Insurance intermediaries and service specialists
-Main consumer problem in the insurance industry
-Consumer education programme (InsuranceInfo)
-Self-regulation
 Learning Objectives
Upon completion of this chapter, you should be able to understand :-

1. 2. 3.
Main components of
Other Market Component Consumer right
Insurance Market
 “
AGENT and BROKER are the
middlemen in the insurance market.
—Intermediaries
 AGENT

An agent is a person who Based on the agency agreement,

represents an insurance
company in the performance of
any functions covered by the
terms of agency agreement.
an AGENT is permitted to solicit:
- insurance business
-collect premiums
-issue cover notes on behalf of
the insurers.
 BROKER

1. 2. 3.
An insurance broker is an His job is to advise his Brokers are expected to have
agent who acts on clients on the most in-depth knowledge of
behalf of the suitable covers at the most
economic cost.
insurance and therefore are
subject to professional liability.
insured.

5.
4.
Brokers are remunerated through
Helps in presenting payment of commission by the insurers.
claims and getting them Commissions rates paid to broker are higher
settled. that that paid to insurance agents.
1.Anika Insurance Brokers Sdn. Bhd.
2.Antah Insurance Brokers Sdn. Bhd.
3.Aon Insurance Brokers (Malaysia) Sdn.
Bhd.
4.BIB Insurance Brokers Sdn. Bhd.
5.KSDC Insurance Brokers Sdn. Bhd.
6.MIT Insurance Brokers Sdn. Bhd.
(Previously MIT Perinsima)
BROKER
7. MMS (Insurance Brokers) Sdn. Bhd. (Insurance & Takaful brokers)
8.MP Honan Insurance Brokers Sdn. Bhd.
9. Protac Insurance Brokers Sdn. Bhd.
10. Rosegate Insurance Brokers Sdn. Bhd.
11.Sentinel Insurance Brokers Sdn. Bhd.
12. Sime Darby Lockton Insurance Brokers
Sdn. Bhd. ● Source:

13. SP&G Gallagher Insurance Brokers Sdn. https://www.bnm.gov.my/-/approved-insurance-and-takaful-brokers

Bhd.
14. State Insurance Brokers Sdn .Bhd
15. Sterling Insurance Brokers Sdn. Bhd.
16. Tradewinds International Insurance
Brokers Sdn. Bhd
17. Transnational Insurance Brokers (M)
The channel structure of the insurance industry
 Roles of Intermediaries in claim settlement
procedure

Communication of
Claim notification insurer ‘s and Claim settlement
insured’s position

Recommendations
Help with claim Claim negotiating to the insured in
document or broking the event of a
claim dispute

Recording and
Claim review monitoring the Funding the claim
claim
 SERVICE EXPERT
LOSS ADJUSTER LOSS ASSESSOR
ENGINEER MARINE & CARGO
SURVEYOR

Engineering firms are They are specialists They investigate the

They are generally
generally retained by appointed by insurer cause and extent of
employed by insured
insurance companies to survey ships and the loss and report
when it is difficult to
to report on risks or cargoes that have their findings and
assess the extent of
claims on boilers, been damaged and recommendations to
the loss. He is
pressure vessels, lifts, to report on the the insurer who
specialist in
cranes etc. cause and extent of would then decide
calculating loss
loss. whether the loss is
settlement.
covered and if so,
the amount of
compensation
required.
https://www.bnm.gov.my/-/regis
tered-adjusters
Part 2: Consumer Right
Consumer Right

Right to satisfaction

Right to information

Right to be heard

Right to redress

Right to choose

Right to basic goods and services

Right to consumer education

Right to safe and clean environment

Main causes of consumer complaint

Uncertainty about Difficulty in

the financial understanding
security of insurers the insurance and
and takaful operator takaful documents

Insufficient
information
provided before
purchase
CONSUMER EDUCATION PROGRAMME

The programme is a collaborative effort of the Bank and the

insurance and takaful industries, namely Life Insurance
Association of Malaysia (LIAM), Persatuan Insuran Am Malaysia
(PIAM) and Malaysian Takaful Association (MTA) Consumer
Education Programme in 29 August 2003.

known as
InsuranceInfo.
 Objectives of InsuranceInfo
1.
Providing and disseminating 2.
information on insurance and takaful Familiarizing public with
products and services, important terms
and conditions of insurance policies and underwriting and claims
the rights and responsibilities of issues.
consumers, in clear and simple manner.

3.
Creating awareness of ethical 4.
market practices such as Advising customers on how
consumers can be more to seek redress (compensation) if not
assertive and discerning in satisfied.
making decisions.
SELF-REGULATION
Insurance companies and takaful
operators actively avoid
taking some actions or, on the
other hand, take certain actions
voluntarily.

Individual and
industry wide
decision.
OBJECTIVES OF SELF REGULATION

1.
To instill discipline and promote
healthy competition in the
industry;

2.
To provide some element of
protection to insurance and
takaful consumers.
 EXAMPLE OF SELF REGULATION

Persatuan Insurans Am Malaysia Life Insurance Association of

(PIAM) Malaysia (LIAM)

Malaysia Insurance and Takaful

Broking Association (MITBA) Association of Malaysian Loss
Adjuster (AMLA)
https://www.mitba.org.my/EN/home
Thanks!