PCE – Part B General Insurance
• Revision 01 (25/11/2011)
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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…
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CHAPTER 14 :
CHARACTERISTICS OF GENERAL
INSURANCE PRODUCTS (OVERVIEW)
9.1
Introduction
9.2
Characteristics of General Insurance
Products
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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.
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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
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CHAPTER 15
CLASSES OF GENERAL INSURANCE BUSINESS
&
GENERAL TAKAFUL BUSINESS
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CHAPTER 15
CLASSES OF GENERAL INSURANCE
BUSINESS & GENERAL TAKAFUL BUSINESS
How many classes of General
Insurance available in the market?
Please name me 1…
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CHAPTER 15
CLASSES OF GENERAL INSURANCE
BUSINESS & GENERAL TAKAFUL BUSINESS
15.1
15.2
15.3
15.4
15.5
Marine Insurance
Fire Insurance
Motor Insurance
Miscellaneous Accident Insurance
Types of Takaful Business
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15.1 : Marine Insurance
Type of policy
Subject matter of insurance
- Hull
- Vessel, machinery & limited
collision liability
- Cargo
- Cargo (goods carried on the vessel)
- Freight
- Building Risk
- Freight (money/fee charged for carriage of
goods by the vessel)
- Vessel under construction
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15.1 : Marine Insurance
Institute Cargo
Clauses B
Institute Cargo
Clauses A
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Institute Cargo
Clauses C
15.1 : Marine Insurance
Perils
Clauses
AB
C
 
Fire, explosion, collision
 
Earthquake, volcanic eruption, lightning
 
Jettison, general average & salvage
 
Discharge of cargo at port of distress
 
Striking, stranding, capsizing
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15.1 : Marine Insurance
Perils
Clauses
AB
C



Entry of sea water into vessel

Total loss of package(loading/discharge)
 
Pirates and thieves
 
Deliberate damage or destruction
 
Washing overboard
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15.2 : Fire Insurance
Fire Insurance
Consequential
Loss
Houseowner
Householder
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15.2 : Fire Insurance
Type of policy
- Fire
- Houseowner
- Householder
- Consequential
Loss
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Subject matter of insurance
- Buildings and contents
- Private dwellings
- Household content
- Insured’s profit
CHAPTER 15
10.2 : Fire Insurance
A: Standard Fire
B: Standard Houseowner
C: Standard Householder
Perils
AB
C
Fire, lightning, explosion (domestic gas)
 
War, nuclear
  
Burning of property by authority
  
Earthquake, volcanic eruption
# 
# 
Subterranean fire, flood
#: Extension is available
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15.2 : Fire Insurance
Perils
Aircraft damage, impact damage
Overflowing of water tanks
Removal of debris, architect fee, rental
Typhoon, hurricane, windstorm
Burning of forest & bush lallang
A: Standard Fire
B: Standard Houseowner
C: Standard Householder
AB
# 
# 
# 
#
# ##
#: Extension is available, : Extension with condition
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C
15.2 : Fire Insurance
Perils
Fermentation, natural heating
Spontaneous combustion
Riot, strike and malicious damage
Subsidence or landslip
Plate glass
A: Standard Fire
B: Standard Houseowner
C: Standard Householder
AB
###
# ##
# ##
###
## #
#: Extension is available, : Extension with condition
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C
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)
Exclusio
n
Extensio
n
(ii) Additional expense to minimize loss of
turnover
Similar to fire policy
(i) Similar to fire policy
(ii) Loss of gross profit arising from
business interruption in other’s premises
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10.3 : Motor Insurance (Types of Vehicles)
Commercial
Vehicle
Private Car
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Motorcycle
15.3 : Motor Insurance (Types of Cover)
Act Only
Third Party,
Fire & Theft
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Third Party
Only
Comprehensive
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
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15.4 : Miscellaneous Accident Insurance
Theft Insurance Liability
Insurance
Personal
Accident
Engineering
Insurance
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Fidelity
Guarantee
Aviation
Insurance
15.4.1 : Theft Insurance
Burglary
Insurance
All Risks
Insurance
Goods in
Transit
Money
Insurance
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15.4.2 : Liability Insurance
Workmen’s
Compensation
Products
Employers’
Liability
Liability
Professional
Indemnity
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Public
Liability
15.4.3 : Personal Accident (Types of Benefit)
Death
Permanent
Disablement
Temporary
Disablement
Medical
Expenses
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15.4.4.1 : Fidelity Guarantee (Types of Policies)
Collective
Policy
Individual
Policy
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Blanket
Policy
15.4.4.2 : Bonds (The 3 Parties)
Contractor
Employer
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Surety
(Insurer)
15.4.5 : Engineering Insurance
Boiler
Explosion
Erection
All Risks
Contractors’
All Risks
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Machinery
Breakdown
Electronic
Equipment
15.4.6: Aviation Insurance
Personal
Accident
Freight
Liability
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Loss of
Licence
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.
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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
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CHAPTER 15
Policy Benefit Limitations
a. General Waiting Period
c. Co-payments
Shall not exceed 30 days from policy effective date
b. Specified Illnesses
Shall not exceed 120 days from policy effective date
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CHAPTER 15
Exclusions
1) Pre-existing conditions
2) Congenital abnormalities or deformities including
hereditary conditions
3) Plastic/ Cosmetic surgery, circumcision and eye
examination
4) Pregnancy, childbirth, miscarriage and abortion
5) Disabilities arising out of duties of employment that are
covered under workmen’s compensation insurance
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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
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CHAPTER 15
Golfers Insurance
Basic Cover
4)Hole in one expenses
1) Liability to the public
3)Golfing Equipment/ Golf Clubs
2) Personal Accident
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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
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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
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CHAPTER 16
PRACTICE OF GENERAL INSURANCERISK ASSESSMENT, UNDERWRITING & RATING
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CHAPTER 16
PRACTICE OF GENERAL INSURANCERISK ASSESSMENT, UNDERWRITING&
RATING
Who are involving in the process of
Underwriting?
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CHAPTER 16
PRACTICE OF GENERAL INSURANCERISK ASSESSMENT, UNDERWRITING& RATING
16.1
16.2
16.3
16.4
16.5
16.6
16.7
16.8
16.9
16.10/12
Underwriting
The Underwriting Process
Determination of Premiums, Terms & Conditions
Confirmation of Acceptance
Reinsurance & Coinsurance
Rating
Minimum Premium
Minimum Sum Insured
Refund of Premium
How to Use Tariff
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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)
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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
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CHAPTER 16
16.2 : The Underwriting Process - Physical Hazards
Fire
- Type of construction, Height of Building
- Nature of Flooring, Type of Occupancy etc
Motor
- Type of vehicle, Cubic capacity, Use of Vehicle
- Age & condition of vehicle, Modification on Vehicle
Burglary
- Nature of Stock, Situation
- Type of Construction, Security Precaution
Personal - Age of Person, Type of Occupation
Accident - Health & Physical Condition, Hobbies
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CHAPTER 16
16.2 : The Underwriting Process- Moral Hazards
Unreasonableness
Carelessness
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Fraud
CHAPTER 16
16.3 : Determination of Premiums, Terms & Conditions
Risk
Improvement
Warranties
Exclusion
Excess
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Restricted
Cover
Franchise
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.
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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
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CHAPTER 16
16.6 : Rating
Individual
Class
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Merit
CHAPTER 16
16.7/8 : Minimum Premium /Minimum Sum Insured
Minimum Premium
Fire
RM 50
Private Car
RM 50
Motorcycle
RM 20
Workmen Compensation
RM 35
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CHAPTER 16
16.10/12 : How to Use Tariff
Workmen
Compensation
Fire
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Motor
CHAPTER 16
16.9 : Refund of Premium
• Premium is refundable due to
- Failure of consideration
- Provision in the policy
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CHAPTER 17
INSURANCE DOCUMENTS
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CHAPTER 17
Why do we need to fill up a
Proposal Form?
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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
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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
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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
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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.
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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
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CHAPTER 17
17.1.1 : The Structure of A Proposal Form
(c) Insurance Related Questions
Some examples:Fire Insurance
Type of construction and
use of the building
Whether building is detached
or adjoined to another
Type of power used
Occupation of adjoining
building (left & right)
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Motor Insurance
 Cubic capacity
 Year of manufacture
 Driving offences
 Cover required
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
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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
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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
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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
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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
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CHAPTER 17
17.4.1.5 : The Schedule
The information in the schedule: Insured name and address
 Risk covered
 Premium
 Period of Insurance
 Policy number
 Property Insured
 Date of issue
 Sum Insured
 Agency
 Warranties applicable
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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
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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.
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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
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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
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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”
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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
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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
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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 avoid the possibility of any further claims
being made in relation to the loss
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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
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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
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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
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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
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CHAPTER 18
PRACTICE OF GENERAL INSURANCE: CLAIMS
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CHAPTER 18 : CLAIMS
What are our roles in facilitating a Claim?
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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
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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
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CHAPTER 18
18.1.2 : Checking Coverage
Notice of loss received
Preliminary check
valid claim exists
Claim Form/ Accident Report Form
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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?
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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
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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
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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
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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)
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CHAPTER 18 : CLAIMS
Part D : Settlement of Claims
Methods of Settling a Claim
 Cash-payment of claim by cheque, or
 Repair
 Replacement
 Reinstatement
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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
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CHAPTER 18 : CLAIMS
Part G :Average
 When under-insurance exists, the policy is subject
to average
Amount
Payable
=
Sum Insured
Value of property
x
Amount of
Loss
 The principle of average is therefore applied to
penalise the insured who has underinsured his
property
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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
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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
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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
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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
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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
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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
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CHAPTER 19
PRACTICE OF GENERAL INSURANCE :
POLICY FORMS
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CHAPTER 19 : POLICY FORMS
What information can we obtain from
Policy Forms?
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CHAPTER 19 : POLICY FORMS
PART A : OVERVIEW
• Fire Policy
• Private Motor Car Policy
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CHAPTER 19 : POLICY FORMS
19.1 FIRE POLICY
• Heading
• Recital Clause
• Operative Clause
• Conditions
• Exclusion
• Schedule
• Attestation
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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
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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
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CHAPTER 19 : POLICY FORMS
19.1 FIRE POLICY
Condition
• Misrepresentation
• Premium Payment
• Other insurance
• Fall or displacement of building
• Unoccupancy
• Refund of premium
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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
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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
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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
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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
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CHAPTER 19 : POLICY FORMS
19.2 PRIVATE MOTOR CAR POLICY
• Heading
• Recital Clause/Preamble
• Operative Clause
• General Exclusion
• Conditions
• Schedule
• Attestation
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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
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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
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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
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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
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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
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CHAPTER 20
PRACTICE OF GENERAL INSURANCE:
ETHICS AND CODE OF CONDUCT
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CHAPTER 20 :
ETHICS AND CODE OF CONDUCT
What are the good
Ethics and Code of Conduct?
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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
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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
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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
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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
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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
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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
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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
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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
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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
- Theft
- 3rd Party
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- Total loss
- Subrogation
Thank You
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