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PCE – Part B General Insurance. Revision 01 (25/11/2011). CHAPTER 14 . CHARACTERISTICS OF GENERAL INSURANCE PRODUCTS (OVERVIEW). How much do you understand about General Insurance ?. Share only 1 point about GI that comes across to your mind…. CHAPTER 14 : CHARACTERISTICS OF GENERAL

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pce part b general insurance

PCE – Part B General Insurance

Revision 01 (25/11/2011)

slide2

CHAPTER 14

CHARACTERISTICS OF GENERAL

INSURANCE PRODUCTS (OVERVIEW)

How much do you understand about General Insurance?

Share only 1 point about GI that comes across to your mind…

slide3

CHAPTER 14 :

CHARACTERISTICS OF GENERAL

INSURANCE PRODUCTS (OVERVIEW)

  • 9.1 Introduction
  • 9.2 Characteristics of General Insurance Products
slide4

14.1 : Introduction

  • General insurance provides cover against risks usually not covered by life insurance.
  • In general, not every policy will eventually
  • become a claim.
slide5

14.2 : Characteristics of General Insurance

Products

  • General insurance contracts are short-term contracts
  • with varying premiums at renewals.
  • General insurance contracts are contracts of indemnity.
  • Payment of a claim does not terminate a general
  • insurance contract
  • The risk to be insured does not necessarily increase with time
slide6

CHAPTER 15

CLASSES OF GENERAL INSURANCE BUSINESS &

GENERAL TAKAFUL BUSINESS

slide7

CHAPTER 15

CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS

How many classes of General Insurance available in the market?

Please name me 1…

slide8

CHAPTER 15

CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS

  • 15.1 Marine Insurance
  • 15.2 Fire Insurance
  • 15.3 Motor Insurance
  • 15.4 Miscellaneous Accident Insurance
  • 15.5 Types of Takaful Business
slide9

15.1 : Marine Insurance

Type of policy

Subject matter of insurance

  • - Hull
  • Cargo
  • Freight
  • - Building Risk
  • - Vessel, machinery & limited
  • collision liability
  • Cargo (goods carried on the vessel)
  • Freight (money/fee charged for carriage of goods by the vessel)
  • - Vessel under construction
slide10

15.1 : Marine Insurance

Institute Cargo

Clauses B

Institute Cargo

Clauses A

Institute Cargo

Clauses C

slide11

15.1 : Marine Insurance

Clauses

Perils

A

B

C

 

Striking, stranding, capsizing

Fire, explosion, collision

 

Earthquake, volcanic eruption, lightning

 

Jettison, general average & salvage

 

Discharge of cargo at port of distress

 

slide12

15.1 : Marine Insurance

Clauses

Perils

A

B

C

Washing overboard



Entry of sea water into vessel



Total loss of package(loading/discharge)



Pirates and thieves

 

Deliberate damage or destruction

 

slide13

15.2 : Fire Insurance

Consequential Loss

Fire Insurance

Householder

Houseowner

slide14

15.2 : Fire Insurance

Type of policy

Subject matter of insurance

- Fire

- Houseowner

- Householder

- Consequential

Loss

- Buildings and contents

- Private dwellings

- Household content

- Insured’s profit

slide15

#

#





CHAPTER 15

10.2 : Fire Insurance

A: Standard Fire

B: Standard Houseowner

C: Standard Householder

Perils

A

B

C

Fire, lightning, explosion (domestic gas)

 

War, nuclear

  

Burning of property by authority

  

Earthquake, volcanic eruption

Subterranean fire, flood

#: Extension is available

slide16

#

#

#







15.2 : Fire Insurance

A: Standard Fire

B: Standard Houseowner

C: Standard Householder

Perils

A

B

C

Aircraft damage, impact damage

Overflowing of water tanks

Removal of debris, architect fee, rental

#

Typhoon, hurricane, windstorm

# ##

Burning of forest & bush lallang

#: Extension is available, : Extension with condition

slide17

15.2 : Fire Insurance

A: Standard Fire

B: Standard Houseowner

C: Standard Householder

Perils

A

B

C

# ##

Fermentation, natural heating

###

Spontaneous combustion

## #

Riot, strike and malicious damage

## #

Subsidence or landslip

###

Plate glass

#: Extension is available, : Extension with condition

slide18

15.2 : Fire Insurance (Consequential Loss)

Basic Cover

(i) Loss of gross profit due to reduction of

turnover (total amount of goods or services sold)

(ii) Additional expense to minimize loss of

turnover

Exclusion

Similar to fire policy

Extension

(i) Similar to fire policy

(ii) Loss of gross profit arising from

business interruption in other’s premises

slide19

10.3 : Motor Insurance (Types of Vehicles)

Commercial Vehicle

Private Car

Motorcycle

slide20

15.3 : Motor Insurance (Types of Cover)

Third Party Only

Act Only

Third Party, Fire & Theft

Comprehensive

slide21

15.3 : Motor Insurance (Types of Cover)

Act Only

Death/Bodily injury to 3rd party

3rd Party Cover

Act only + 3rd party property

3rd Party, Fire & Theft

3rd Party + Loss/Damage to insured vehicle by fire or theft

Comprehensive

3rd Party, Fire & Theft + Accidental Damage + medical Expense + Personal Accident

slide22

15.4 : Miscellaneous Accident Insurance

Theft Insurance

Liability Insurance

Personal Accident

Fidelity Guarantee

Engineering Insurance

Aviation Insurance

slide23

15.4.1 : Theft Insurance

All Risks Insurance

Burglary Insurance

Money Insurance

Goods in Transit

slide24

15.4.2 : Liability Insurance

Workmen’s Compensation

Products Liability

Employers’ Liability

Professional Indemnity

Public Liability

slide25

15.4.3 : Personal Accident (Types of Benefit)

Permanent Disablement

Death

Medical Expenses

Temporary Disablement

slide26

15.4.4.1 : Fidelity Guarantee (Types of Policies)

Collective Policy

Individual Policy

Blanket Policy

slide27

15.4.4.2 : Bonds (The 3 Parties)

Contractor

Employer

Surety

(Insurer)

slide28

15.4.5 : Engineering Insurance

Boiler Explosion

Machinery Breakdown

Erection All Risks

Contractors’ All Risks

Electronic Equipment

slide29

15.4.6: Aviation Insurance

Personal Accident

Freight Liability

Loss of Licence

slide30
15.4.7 Medical And Health Insurance (MHI)
  • A policy of insurance on disease, sickness or medical expense that provides specified benefits against risks of persons becoming totally or partially incapacitated as a result of sickness or accident.
  • Policy benefits are usually paid out in the manner according to the policy type or cover purchased as follows:
    • reimbursement of medical expenses
    • lump sum payment of the sum insured, or
    • an allowance for the period the policyowner is hospitalized.
slide31

CHAPTER 15

CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS

  • Basic Cover

1) Hospitalization and Surgical Insurance.

- Common Policy Extensions/ Benefits:

a) Outpatient Clinical Insurance

b) Maternity Benefit

2) Major Medical Insurance

3) Dread Disease/ Critical Illness Insurance

4) Disability Income Insurance

5) Hospital Income Insurance

slide32

CHAPTER 15

  • Policy Benefit Limitations

c. Co-payments

a. General Waiting Period

Shall not exceed 30 days from policy effective date

b. Specified Illnesses

Shall not exceed 120 days from policy effective date

slide33

CHAPTER 15

  • Exclusions
  • Pre-existing conditions
  • Congenital abnormalities or deformities including hereditary conditions
  • Plastic/ Cosmetic surgery, circumcision and eye examination
  • Pregnancy, childbirth, miscarriage and abortion
  • Disabilities arising out of duties of employment that are covered under workmen’s compensation insurance
slide34

CHAPTER 15

  • Exclusions

6)Psychotic, mental or nervous disorders

7) Sickness or injury arising from racing of any kind (except foot racing)

8) Expenses incurred for sex changes

9) Investigation and treatment of sleep and snoring disorders, hormone replacement therapy and alternative therapy

10)Costs of services of a non-medical nature such as television,telephones etc

11) Private flying other than as a fare paying passenger

slide35

CHAPTER 15

  • GolfersInsurance

Basic Cover

4)Hole in one expenses

1) Liability to the public

3)Golfing Equipment/ Golf Clubs

2) Personal Accident

slide36

CHAPTER 15

CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS

  • Exclusions
  • War risks, riot strike and civil commotion
  • Wear & Tear, depreciation, gradual deterioration or any process of repairing
  • Loss destruction/ Damage directly caused by or contributed to by or arising from radioactive or nuclear risks
  • Terrorism risk
slide37

CHAPTER 15

CLASSES OF GENERAL INSURANCE BUSINESS & GENERAL TAKAFUL BUSINESS

  • 15.5 : Takaful Business
  • General Takaful business is all takaful business which is
  • not Family Takaful Business
  • General Takaful scheme is short-term Tabaruk Contract
  • Participants in the scheme agree to pay entire
  • contributions to create General Takaful Fund
  • After deducting operational costs, the surplus shall be
  • shared between participants and Takaful company
  • according to Principle of Mudharabah
slide38

CHAPTER 16

PRACTICE OF GENERAL INSURANCE-

RISK ASSESSMENT, UNDERWRITING & RATING

slide39

CHAPTER 16

PRACTICE OF GENERAL INSURANCE-

RISK ASSESSMENT, UNDERWRITING& RATING

Who are involving in the process of Underwriting?

slide40

CHAPTER 16

PRACTICE OF GENERAL INSURANCE-

RISK ASSESSMENT, UNDERWRITING& RATING

  • 16.1 Underwriting
  • 16.2 The Underwriting Process
  • 16.3 Determination of Premiums, Terms & Conditions
  • 16.4 Confirmation of Acceptance
  • 16.5 Reinsurance & Coinsurance
  • 16.6 Rating
  • 16.7 Minimum Premium
  • 16.8 Minimum Sum Insured
  • 16.9 Refund of Premium
  • 16.10/12 How to Use Tariff
slide41

CHAPTER 16

16.1 : Underwriting

  • The purpose of underwriting is to
  • - Guard against anti-selection
  • - Charge a premium that is commensurate with the
  • risk transferred
  • When anti-selection exists within a class of risks, the
  • actual loss will be greater than the expected loss
  • because the class of risks does not represent a
  • randomly selected group (Law of Large Number)
slide42

CHAPTER 16

16.2 : The Underwriting Process

  • Underwriting can be defined as:
  • - A process of assessment and selection of risks
  • - Determination of premium, terms and conditions
slide43

CHAPTER 16

16.2 : The Underwriting Process - Physical Hazards

- Type of construction, Height of Building

- Nature of Flooring, Type of Occupancy etc

Fire

- Type of vehicle, Cubic capacity, Use of Vehicle

- Age & condition of vehicle, Modification on Vehicle

Motor

- Nature of Stock, Situation

- Type of Construction, Security Precaution

Burglary

- Age of Person, Type of Occupation

- Health & Physical Condition, Hobbies

Personal Accident

slide44

CHAPTER 16

16.2 : The Underwriting Process- Moral Hazards

Unreasonableness

Carelessness

Fraud

slide45

CHAPTER 16

16.3 : Determination of Premiums, Terms & Conditions

Risk Improvement

Warranties

Exclusion

Restricted Cover

Excess

Franchise

slide46

CHAPTER 16

16.4 : Confirmation of Acceptance

  • If the terms and conditions are acceptable to proposer, the insurer will usually issue cover note as evidence of temporary cover.
slide47

CHAPTER 16

16.5 : Reinsurance & Coinsurance

  • Reinsurance is an arrangement where the insurer
  • reinsures/cedes the part of risk assumed which is in excess of his retention to reinsurer
  • Coinsurance is an arrangement between two or more insurers to share original risk
slide48

CHAPTER 16

16.6 : Rating

Individual

Class

Merit

slide49

CHAPTER 16

16.7/8 : Minimum Premium /Minimum Sum Insured

Minimum Premium

RM 50

Fire

RM 50

Private Car

Motorcycle

RM 20

RM 35

Workmen Compensation

slide50

CHAPTER 16

16.10/12 : How to Use Tariff

Workmen Compensation

Fire

Motor

slide51

CHAPTER 16

16.9 : Refund of Premium

  • Premium is refundable due to
  • - Failure of consideration
  • - Provision in the policy
slide52

CHAPTER 17

INSURANCE DOCUMENTS

slide53

CHAPTER 17

Why do we need to fill up a Proposal Form?

slide54

CHAPTER 17

Part A : Overview

  • The Proposal Form
  • The Cover Note
  • The Certificate of Insurance
  • The Policy Form
  • Endorsement
  • Renewal Notice
  • Renewal Certificate
  • Claims Form
  • Discharge Form
slide55

CHAPTER 17

Part B : Proposal Form

1. An insurance contract is effected when the offer

made by one party (the proposer) is accepted by

the other party (the insurer).

2. It is a document drafted by insurer in the form of

questionnaires to gather information required to

access a risk being proposed.

3. Proposal Forms are not used in Marine Cargo

Insurance and For Large Risks

slide56

CHAPTER 17

Part B : Proposal Form

17.1.1 : The Structure of A Proposal Form

It is divided into 5 sections:-

(a) Requirements of Insurance Act, 1996

(b) Questions of a General Nature

(c) Insurance related Questions

(d) Declaration

(e) Signature

slide57

CHAPTER 17

17.1.1 : The Structure of A Proposal Form

(a) Requirements of Insurance Act, 1996 Subsection 149(4)

You are to disclose in the proposal from, fully and faithfully all the facts which you know or ought to know, otherwise the policy issued hereunder may be invalidated.

slide58

CHAPTER 17

17.1.1 : The Structure of A Proposal Form

(b) Questions of a General Nature

  • Proposer’s Name
  • Proposer’s Address
  • Risk Address
  • Proposer’s Occupation
  • Previous and Present Insurance
  • Loss Experience
  • Sum Assured
  • Subject Matter
slide59

CHAPTER 17

17.1.1 : The Structure of A Proposal Form

(c) Insurance Related Questions

Some examples:-

Fire Insurance Motor Insurance

Type of construction and  Cubic capacity

use of the building

Whether building is detached  Year of manufacture

or adjoined to another

Type of power used  Driving offences

Occupation of adjoining  Cover required

building (left & right)

slide60

CHAPTER 17

Part C : The Cover Note

A Cover Note is issued:-

 in advance of a policy when negotiation is completed

 during the course of negotiation

 when a survey has to be carried out

slide61

CHAPTER 17

A Cover Note :-

 a temporary policy

 evidence of the insurance contract

 provides the usual coverage found in a

standard policy

 provides that the insurance is subject to Tariff

warranties if the risk proposed is governed by a Tariff

slide62

CHAPTER 17

Part D : The Certificate of Insurance

 A certificate of Insurance is issued when insurance is made compulsory by law

 The marine certificates (not compulsory by law) are issued by mutual agreement between Insured and Insurer

 The marine certificate provides evidence of insurance to interested parties including banks and consignees

slide63

CHAPTER 17

Part E : The Policy Form

 A policy is a document drafted by the insurer

 A policy has to be stamped

 Use the wording provided by the Tariff if the

insurance is governed by Tariff

 Types of policy form :-

* Scheduled

* Narrative

AIA

slide64

CHAPTER 17

17.4.1 : The structure of a Scheduled Policy Form

Heading

The Preamble or Recital Clause

The Operative or Insurance Clause

Exclusion

The Schedule

Attestation or Signature Clause

Conditions

slide65

CHAPTER 17

17.4.1.5 : The Schedule

The information in the schedule:-

Insured name and address

Premium

 Policy number

Date of issue

Agency

 Risk covered

 Period of Insurance

 Property Insured

 Sum Insured

 Warranties applicable

slide66

CHAPTER

12.4.1.7 : Conditions

Classification of conditions:-

(i) Express

(ii) Implied

(iii) the time that conditions need to be fulfilled

* Conditions Precedent to Contract

* Conditions Subsequent to Contract

* Conditions Precedent to Liability

slide67

CHAPTER 17

17.4.2 : Policy Register

Section 47 of Insurance Act 1996 - every insurer shall maintain an up-to-date register of all policies and none of them shall be removed as long as the insurer is still liable for these policies.

slide68

CHAPTER 17

Part F : Endorsement

(a) Endorsements are used to modify The Terms &

The Standard Policy Document

 The endorsement form part of the policy

 In certain classes of business, the attachment of endorsement to the policy is compulsory.

Eg. Workmen’s Compensation Insurance and

Motor Insurance

slide69

CHAPTER 17

(b) Endorsements May Incorporate Alterations to

an Existing Policy

 Variation in Sum Insured

 Change of Insurable Interest

 Extension of insurance

 Change of risk

 Transfer of property to another location

 Cancellation of insurance

 Change in name and address

slide70

CHAPTER 17

Part G : Renewal Notice

 Insurers usually issue a renewal notice one month in advance of the date of expiry

 Important notes in renewal notice:-

* A note advising the insured to disclose any

materials alterations in the risk since the

inception of policy (or last renewal date)

* “No risk can be assumed unless the premium

is paid in advance”

slide71

CHAPTER 17

Part H : Renewal Certificate

 Renewal Certificate will be issued if the renewal is on similar terms as the original contract

 If the renewal is on different terms, a fresh policy is

usually issued

slide72

CHAPTER 17

Part I : Claim Form

 Claim forms are documents drafted by the insurers to gather information relevant to assessing claims

 The issue of a claim form does not constitute an

admission of liability on the part of the insurance

 Claim forms are not used in

marine insurance except in

respect of inland transit claims

slide73

CHAPTER 17

Part J : Discharge

(i) Claims Settlement Methods

 settlement with an insured in respect of an

insured loss(own loss); or

 settlement with 3rd party on behalf of an insured

in respect of the insured’s liability for loss caused

to the 3rd party(Liability to 3rd party)

(ii) The Purpose of a Discharge

To avoidthe possibility of any further claims

being made in relation to the loss

slide74

CHAPTER 17

Part J : Discharge

(iii) The Declaration Section of The Discharge Form

[a] “Own loss” declaration stating that the insured

claimant:-

 has received a sum of money from the insurer

 the money received is in full satisfaction of his

claim under the policy in relation to that loss

slide75

CHAPTER 17

Part J : Discharge

(iii) The Declaration Section of The Discharge Form

[b] “Liability to 3rd party” declaration stating that the 3rd party claimant:-

 has received a sum of money from the insurer

 the money received is paid by the insurer on

behalf of the insured, and

 the money received is in full satisfaction of the

3rd party’s right to claim from the insured person in respect of the loss

slide76

CHAPTER 17

Part J : Discharge

(iv) If Settlements is Not by CASH...

The insurers would issue a discharge form known as completion / satisfaction note which usually incorporates a declaration stating that:-

 The repair, reinstatement and/or replacement has been effected by a person (on behalf of the insurer), and

 They are carried out to the satisfaction of the claimant

slide77

CHAPTER 17

Part J : Discharge

(v) Other information Provided by a Discharge Form

 Name and identity of the claimant

 Details of the loss:-

* date and time of loss

* place of loss

* parties affected

* subjected matter of loss

* Signature of attesting witness, if required

slide78

CHAPTER 18

PRACTICE OF GENERAL INSURANCE: CLAIMS

slide79

CHAPTER 18 : CLAIMS

What are our roles in facilitating a Claim?

slide80

CHAPTER 18

Part A : Overview

  •  Claims Procedure
  •  Claims Documentation
  •  Settlement of Claims
  •  Recoveries from Reinsurers, Co-insurers,
  • Subrogation and Contribution
  •  Repudiation of Liability by insurers
  •  Average
  •  Claims Settlement Agreement
  •  Disputes
  •  Post-Settlement Action
slide81

CHAPTER 18

Part B : Claims Procedure

18.1.1 : Notification of Loss

 Immediate notification of loss is expected

 The Duty of Good Faith requires the Insured to

minimize the loss

slide82

CHAPTER 18

18.1.2 : Checking Coverage

Notice of loss received

Preliminary check

valid claim exists

Claim Form/ Accident Report Form

slide83

CHAPTER 18

18.1.2 : Checking Coverage

Conditions for a Valid Claim

 Is the policy in force?

 Has premium been paid?

 Is the loss caused by an insured peril?

 Is the subject matter affected by the loss the same as that insured under the policy?

 Has notice of loss been given without undue delay?

???

slide84

CHAPTER 18

18.1.4 : Investigation of The Claim

 A small claim will usually be paid on the basis of

documents submitted by the claimant

 Advice is sought from loss adjustors in setting large and complicated claims

 Claim investigation involves ascertaining:-

* The validity of a claim

* The amount of loss

slide85

CHAPTER 18

18.1.5 :Ascertaining the Amount of Loss

 Property damage or loss claims:

Proof of the value of lost items or estimates of

repair, replacement or reinstatement.

 Liability claims:

Subjection of negotiation between the insurer and the person who has suffered injury or property damage

slide86

CHAPTER 18

Part B : Claims Procedure

18.1.6 :Ascertain Subrogation rights & Contribution Duties

Notice of loss received

Preliminary check

valid claim exists

Claim Form/ Accident Report Form

Investigation of the Claim

Ascertaining the amount of loss

Ascertain Subrogation rights & Contribution Duties

slide87

CHAPTER 18 : CLAIMS

Part C : Claim Document

The documents required vary with the type and nature

of the claim.

Fire Insurance

 Photographs

 Technician report (where applicable)

 Purchase invoices, repair bills, sales record and other

related documents

 Police report (where damage is extensive)

 Fire brigade report (where damage is extensive)

slide88

CHAPTER 18 : CLAIMS

Part D : Settlement of Claims

Methods of Settling a Claim

 Cash-payment of claim by cheque, or

 Repair

 Replacement

 Reinstatement

slide89

CHAPTER 18 : CLAIMS

Part F :Repudiation of Liability by Insurers

Repudiation of liability is based on several grounds:-

 There was no loss or damage as reported;

 The loss or damage for which a claim has been made

was not caused by a peril or was excluded by the

policy; or

 The policy has been rendered void as a result of a

breach in condition (implied / express) or warranty

slide90

CHAPTER 18 : CLAIMS

Part G :Average

 When under-insurance exists, the policy is subject

to average

Amount = Sum Insured x Amount of

Payable Value of property Loss

 The principle of average is therefore applied to penalise the insured who has underinsured his property

slide91

CHAPTER 18 : CLAIMS

Part H :Claims Settlement Agreement

 Most motor insurers subscribe to a claim settlement

agreement known as the “Knock-For-Knock”

Agreement

 The participating insurers agree to pay the cost of

repairing their own comprehensively insured cars

regardless of who is to blame

slide92

CHAPTER 18

Advantages of the “Knock-For-Knock” Agreement

 Enable motor insurers to speed up settlement of

claims and reduce legal and administration expenses

Disadvantage of the “Knock-For-Knock”

Agreement

 Withdrawal of policyholder’s NCD upon settlement

of any claim

 Normally, the policyholder will claim against the

negligent motorist’s insurer and thereby retain his NCD

slide93

CHAPTER 18 : CLAIMS

Part I :Disputes

  • Disputes may involve one of the two issues:-
  •  the question of whether the insurer is liable; or
  •  the quantum of loss, if the insurer is liable
  • Dispute is resolved through the following channels:-
  •  Negotiation
  •  Litigation
  •  Arbitration
  •  Insurance Mediation Bureau
slide94

CHAPTER 18 : CLAIMS

Part J :Post-Settlement Action

 Terminate the policy; or

 Reduce the sum insured, and reinstate if requested by insured, in which event new terms and conditions may be imposed

slide95

CHAPTER 18

Part J :Post-Settlement Action

18.9.1 : Terminate Policy

 a total loss arising under the policy; or

 the full sum insured under the policy; or

 a capital sum benefit under a personal accident

policy; or

 any claim under a fidelity guarantee policy

slide96

CHAPTER 18

Part J :Post-Settlement Action

18.9.2 : Reduce Sum Insured and Reinstate,

if requested

18.9.3: Impose New Terms and Conditions

slide97

CHAPTER 19

PRACTICE OF GENERAL INSURANCE : POLICY FORMS

slide98

CHAPTER 19 : POLICY FORMS

What information can we obtain from PolicyForms?

slide99

CHAPTER 19 : POLICY FORMS

PART A : OVERVIEW

  • Fire Policy
  • Private Motor Car Policy
slide100

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Heading
  • Recital Clause
  • Operative Clause
  • Conditions
  • Exclusion
  • Schedule
  • Attestation
slide101

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Heading
  • Consists of the Company’s name and address
  • Recital Clause
  • Insured has proposed to the company
  • Proposal and declaration is basis of contract
  • Insured has paid or agreed to pay premium
slide102

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Operative Clause
  • Coverage
  • Payment of loss
  • Compliance of condition
  • Option to pay cash, repair, reinstate or replace
  • Maximum liability of the company
slide103

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Condition
  • Misrepresentation
  • Premium Payment
  • Other insurance
  • Fall or displacement of building
  • Unoccupancy
  • Refund of premium
slide104

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Condition
  • Notification of loss
  • Fire Brigade charges etc
  • Subrogation
  • Fraudulent Claim
  • Average clause
  • Reinstatement of sum insured
  • Arbitration
slide105

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Exclusion
  • Theft during or after fire, War, Pollution
  • Burning of property by public authority
  • Subterranean fire, Convulsion of nature
  • Bush fire, Explosion (except domestic use)
  • Precious stone, work of art, drawing, stamps
  • Spontaneous fermentation, combustion
slide106

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Reasons for Exclusion
  • Cover by other appropriate policy
  • Further inquiry on the risk
  • Additional premium is necessary
  • The risk is uninsurable
slide107

CHAPTER 19 : POLICY FORMS

  • 19.1 FIRE POLICY
  • Schedule
  • Name of insurer
  • Name and address of insured
  • Business/Occupation
  • Location of property insured
  • Period of insurance, premium & sum insured
  • Endorsement and warranties
  • Attestation
  • This has the effect of binding insurer
slide108

CHAPTER 19 : POLICY FORMS

  • 19.2 PRIVATE MOTOR CAR POLICY
  • Heading
  • Recital Clause/Preamble
  • Operative Clause
  • General Exclusion
  • Conditions
  • Schedule
  • Attestation
slide109

CHAPTER 19 : POLICY FORMS

  • 19.2 PRIVATE MOTOR CAR POLICY
  • Operative Clause
  • Section I: Loss or damage
  • Section II: Liability to 3rd Party
  • Section III: Medical Insurance
  • Section IV: Accidents to Insured
slide110

CHAPTER 19 : POLICY FORMS

  • 19.2 PRIVATE MOTOR CAR POLICY
  • Operative Clause
  • Section I: Loss or damage
  • Accidental collision or overturning
  • Fire or lightning, house breaking or theft
  • Malicious act
  • Direct sea route or whilst in transit
slide111

CHAPTER 19 : POLICY FORMS

  • 19.2 PRIVATE MOTOR CAR POLICY
  • Operative Clause
  • Section I: Exclusion
  • Consequential loss, depreciation
  • Mechanical breakdown
  • Act of cheating
  • Criminal breach of trust
slide112

CHAPTER 19 : POLICY FORMS

  • 19.2 PRIVATE MOTOR CAR POLICY
  • Operative Clause
  • Section II: Liability to 3rd Party
  • Death or bodily injury to 3rd party
  • Damage to property belonging to 3rd party
slide113

CHAPTER 19 : POLICY FORMS

  • 19.2 PRIVATE MOTOR CAR POLICY
  • Operative Clause
  • Section III: Medical Insurance
  • Bodily injury sustained by insured or driver Section IV: Accidents to Insured
  • Bodily injury sustained by insured
slide114

CHAPTER 20

PRACTICE OF GENERAL INSURANCE:

ETHICS AND CODE OF CONDUCT

slide115

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

What are the good

Ethics and Code of Conduct?

slide116

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • OVERVIEW
  • The Essential of Inter-Company Agreement on
  • General Insurance Business
  • Commission
  • Cash-Before-Cover
  • Guidelines on Claim Settlement Practices
slide117

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.1: ICAGIB (Objectives)
  • Promote and protect the interests of the general insurance industry
  • Regulate and control the conduct of every
  • person transacting general insurance business
  • Monitor tariffs, commissions & remuneration
slide118

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.1.1: Dealings with Agents
  • Authorized agents
  • Restriction on payment
  • Compliance with regulations
  • Scope of agency
  • Suspension and Cancellation
  • Information
slide119

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.1.5: General Insurance Business for All Intermediaries (Exclude Insurance Broker)
  • General sales principles
  • Factors to be observed when explaining contract
  • Disclosure of underwriting information
  • Accounts and financial aspect
  • Documentation, existing policyholder and claim
slide120

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.1.5(a): General Sales Principles
  • Make prior appointment
  • Identify own self
  • Recommend policy suitable to needs
  • Recommend other specialist when necessary
  • Treat all information by prospect confidential
slide121

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.1.5(b): Explaining A Contract
  • Identify insurance company
  • Explain all essential provision
  • Draw attention to exclusion/restriction
  • 20.1.5(c): Disclosure of Underwriting Information
  • Proposal forms are fully & accurately completed
  • All answers are prospect’s own responsibility
slide122

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.1.5(d): Accounts and Financial Aspect
  • Keep proper account
  • Distinguish premium from other payment
  • Remit money collected
  • 20.1.5(e-g): Documentation, Policyholder & Claim
  • Provide all documentation to policyholder
  • Render appropriate after sales service
  • Inform insurer immediately should claim arise
slide123

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.2: Commission
  • No discount or rebate is allowed
  • 20.3: Cash Before Cover
  • Part XV Regulation 65 of the Insurance Regulation
  • 1996 provides that an insurer or its insurance
  • agent shall not assume motor policy unless the
  • premium has been paid
slide124

CHAPTER 20 :

ETHICS AND CODE OF CONDUCT

  • 20.4: GUIDELINES ON CLAIMS SETTLEMENT
  • Part I: Deal with claims other than motor
  • - Claim procedure
  • Disclosure of material fact
  • Part II: Deal with motor insurance claims
  • - Own damage - Total loss
  • - Theft - Subrogation
  • - 3rd Party