tag:blogger.com,1999:blog-91386566368283751022024-03-14T03:35:38.344+08:00Insurance Law OnlineKarunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.comBlogger32125tag:blogger.com,1999:blog-9138656636828375102.post-52934922803644766392022-12-13T11:25:00.001+08:002022-12-13T11:25:33.067+08:00<p> </p><p class="MsoNormal"><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">Issues In Professional (General) Partnerships<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><i><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">Observations for purposes of Marketing of
Life Insurance & Family Takaful <o:p></o:p></span></i></b></p>
<p class="MsoListParagraph" style="line-height: normal; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Partnerships
must be registered with their respective professional bodies with whom the
individual partners obtain their annual practicing certificates or licenses, example,
lawyers with the Bar Council and doctors with the Malaysian Medical Council.
Partnerships are <b>not required</b> to register with the Companies Commission
of Malaysia (CCM or SSM).<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraph" style="line-height: normal; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Partnerships
are regulated by the Partnership Act 1961 (revised1974) which provides for the
general rules that apply to partnerships. However, a partnership <b>may have an
agreement among the partners on specific matters relating to their practice and
business operations</b>. In practice however, most partnerships do not enter
into such agreements. This is mainly because of the “<b>trust factor</b>” among
the partners when they start their practice.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: normal; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Although,
some partnerships may have an agreement amongst themselves, they usually do not
provide for the arrangements if death occurs to any one partner, as well as the
benefits that would be payable to the deceased’s estate, and incidental matters
relating to these issues.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">This matter
usually becomes a serious dispute between the surviving partners and the
deceased partner’s family. Such disputes are not often heard by the public nor
are they disputed in the courts. This is simply because there is no agreement
among the partners that addresses this issue and there is no formula as how to
provide for compensation to the deceased’s estate.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">In most cases,
especially, in long standing and established practices, the surviving partners would
want to continue their practice and business. In almost all cases, the
deceased’s estate will eventually accept whatever the surviving partners pay
them as compensation, as they would hardly have any bargaining power.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: normal; mso-list: l1 level1 lfo3; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Sections 35 (1)</span></b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"> of the Partnership Acts states as
follows: <i>Subject to any agreement between the partners, every partnership is
dissolved as regards all the partners by the death or bankruptcy of any
partner.</i><o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; text-align: justify;"><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></b></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">In the simplest
terms, this means, that <b>if partners do not have any agreement</b> that
provides for the continuation of the partnership, <b>it must be closed (dissolved)</b>
<b>and</b> <b>wound up</b>.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">However, as often
seen amongst partnerships, although there is no agreement as such, the death of
a partner does not lead to the partnership being dissolved. Why is this so?
This is because the “agreement” has been entered into by the surviving partners
and the deceased partner’s family (or estate).<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">As stated above,
the essence of this “agreement” is that the estate has agreed to receive a
certain sum of moneys as compensation and agrees to surrender any interest in
the partnership thereafter.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; margin-bottom: 8.0pt; mso-add-space: auto; mso-margin-bottom-alt: 8.0pt; mso-margin-top-alt: 0cm; text-align: justify;"><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">How
do we resolve these issues? <o:p></o:p></span></b></p>
<p class="MsoListParagraphCxSpFirst" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; mso-list: l2 level1 lfo1; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">i)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">The
answer lies in ensuring that there is an agreement amongst the partners during
their lifetime. <o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; mso-list: l2 level1 lfo1; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">ii)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">The
main objective of such an agreement is to buy out the interest of a partner
should he suffer death or total permanent disability (popularly known as Buy-
Sell Agreements).<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; mso-list: l2 level1 lfo1; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">iii)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">The
agreement should provide for a <b>definite sum or a formula</b> to provide for <b>compensation</b>
upon death or total permanent disability of a partner.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; mso-list: l2 level1 lfo1; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">iv)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">The
mechanism of creating these funds is by life insurance or family takaful
contracts on each partner’s life.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; mso-list: l2 level1 lfo1; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">v)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">There
are several other incidental matters that will have to be addressed and
provided in these arrangements. These include the paying of premiums or
contributions, and any tax implications.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="line-height: normal; margin-left: 54.0pt; mso-add-space: auto; mso-list: l2 level1 lfo1; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"><span style="mso-list: Ignore;">vi)<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">The
agreement will have to be prepared by a lawyer who has sufficient knowledge and
experience in these arrangements.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; margin-bottom: 0cm; margin-top: 0cm; mso-add-space: auto; mso-margin-bottom-alt: 8.0pt; mso-margin-top-alt: 0cm; text-align: justify;"><i><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></i></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; margin-bottom: 8.0pt; mso-add-space: auto; mso-margin-bottom-alt: 8.0pt; mso-margin-top-alt: 0cm; text-align: justify;"><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Notes:<o:p></o:p></span></b></p>
<p class="MsoListParagraph" style="line-height: normal; mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 12.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Individual
partners may have their own insurance policies or takaful contracts but that is
not the relevant for purposes of “compensation” when surviving partners take
over the partnership.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoListParagraph" style="line-height: normal; mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="font-family: Symbol; font-size: 12.0pt; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">General
partnerships must be distinguished from Limited Liability Partnerships (LLPs)
which were introduced in Malaysia in 2012.<o:p></o:p></span></p>
<p class="MsoNormal" style="line-height: normal; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; margin-bottom: 0cm; margin-top: 0cm; mso-add-space: auto; mso-margin-bottom-alt: 8.0pt; mso-margin-top-alt: 0cm; text-align: justify;"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p> </o:p></span></p>
<p class="MsoNormal" style="line-height: normal; margin-bottom: 0cm; margin-bottom: 0cm; margin-top: 0cm; mso-add-space: auto; mso-margin-bottom-alt: 8.0pt; mso-margin-top-alt: 0cm; text-align: justify;"><o:p> </o:p></p>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-46928372984510761582021-09-25T14:26:00.003+08:002021-09-25T14:26:28.105+08:00Some info on the bankruptcy process. <p> </p><pre style="background: #F8F9FA; line-height: 150%; text-align: justify; text-justify: inter-ideograph;"><p class="MsoNormal">When a debtor owes moneys to a creditor and does not pay him, the latter (creditor) may </p><p class="MsoNormal"><span lang="EN-US">take the matter to court. If the creditor (plaintiff) is successful, he will eventually </span></p><p class="MsoNormal"><span lang="EN-US">obtain a Judgement Order from the court. If the debtor (defendant) subsequently refuses or</span></p><p class="MsoNormal"><span lang="EN-US">is unable to settle the debt, one of the options of the creditor is to pursue bankruptcy</span></p><p class="MsoNormal"><span lang="EN-US">proceedings against him. </span></p><p class="MsoNormal"><span lang="EN-US">There are phases to a bankruptcy process that one must go through before a person</span></p><p class="MsoNormal"><span lang="EN-US">is made a bankrupt. A bankruptcy action begins with a bankruptcy notice. However, </span></p><p class="MsoNormal"><span lang="EN-US">the issuance of this notice does not mean a person is bankrupt. It only means that </span></p><p class="MsoNormal"><span lang="EN-US">the person has to pay the amount demanded in the notice. If he fails to do so, he</span></p><p class="MsoNormal"><span lang="EN-US"> has committed what is known in law as an “act of bankruptcy”. After the act of </span></p><p class="MsoNormal"><span lang="EN-US">bankruptcy is committed, the creditor will file for a petition of bankruptcy,</span></p><p class="MsoNormal"><span lang="EN-US"> known as a creditor’s petition. This must be filed within 6 months. In Malaysia, </span></p><p class="MsoNormal"><span lang="EN-US">the law has been amended in 2020 to increase the minimum debt required for the </span></p><p class="MsoNormal"><span lang="EN-US">presentation of a bankruptcy petition from RM 50 000 to RM 100 000 (for a period </span></p><p class="MsoNormal"><span lang="EN-US">of one year). The creditor’s petition is a way of starting a hearing in court. </span></p><p class="MsoNormal"><span lang="EN-US">Upon obtaining a hearing date, the creditor’s petition must be heard by the court.</span></p><p class="MsoNormal"><span lang="EN-US">Upon completion of the hearing process of the case, and if the court is convinced</span></p><p class="MsoNormal"><span lang="EN-US">that the person is to be declared a bankrupt, then the court will issue the</span></p><p class="MsoNormal"><span lang="EN-US">bankruptcy order. Only upon issuance of this order can a person be labelled as</span></p><p class="MsoNormal"><span lang="EN-US">a bankrupt.</span><span lang="EN-US" style="background: white; color: #202124; font-family: "Arial",sans-serif;"> </span><span style="background: white; color: #202124; font-family: "Arial",sans-serif;"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="background: white; color: #202124; font-family: "Arial",sans-serif;"><o:p> </o:p></span></p>
</pre>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com1tag:blogger.com,1999:blog-9138656636828375102.post-31463342309884664222021-09-25T14:18:00.001+08:002021-09-25T14:18:18.514+08:00 Conditional Hibah – A Unique Gift for All<p> </p><p class="MsoNormal"><b><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span lang="EN-US" style="mso-ansi-language: EN-US;"><span style="mso-spacerun: yes;">
</span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></b></p>
<p class="MsoListParagraphCxSpFirst" style="margin-left: 32.15pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">Hibah is the concept of voluntary
transfer of assets as gifts during the lifetime of the donor. It is very much
part of Islamic practice, for the purposes of financial and estate planning.
Having been transferred during lifetime of the donor, the asset does not form
part of the estate at the time of his death and therefore, not subject to the
faraid rules of distribution.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="text-align: justify;"><span lang="EN-US" style="mso-ansi-language: EN-US;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 32.15pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The Islamic Financial Services Act
2013 modified this traditional concept of hibah and introduced what is known as
Conditional Hibah in takaful contracts.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="text-align: justify;"><span lang="EN-US" style="mso-ansi-language: EN-US;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 32.15pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">In family or personal accident
takaful contracts, the participant (owner of the contract) can choose a nominee
and declare that person to receive the death claim proceeds as the beneficiary
of a conditional hibah.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 32.15pt; mso-add-space: auto; mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">The features and benefits of this
arrangement of a conditional hibah in the contract, which are indeed unique, are
as follows:<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">i)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">The
participant of a contract may be a Muslim or a Non-Muslim.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">ii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The nominee appointed may be a Muslim or Non-Muslim. Thus, a Muslim participant may
appoint a Non-Muslim nominee and vice versa (traditionally a Non-Muslim is not
entitled to inherit from the estate of a Muslim).<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">iii)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">The
nominee receives the claim moneys and is beneficially entitled to all of it, as
the proceeds are not subject to the faraid rules.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">iv)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">The
participant has the right to change the name of the nominee at any time prior
to his death, without the need of consent of the said nominee.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="margin-left: 72.0pt; mso-add-space: auto; mso-list: l1 level1 lfo2; text-align: justify; text-indent: -36.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">v)<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">The
death claim proceeds do not form part of the estate of the participant for
purposes of creditors in a bankruptcy action, laying a claim to it (creditor
proof). If the participant is a Muslim, this is the only asset that has this
unique benefit as provided by legislation (traditionally the concept of
“creditor proof” does not apply to Muslims).<o:p></o:p></span></p>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-39774561868462328592021-09-25T14:14:00.008+08:002021-09-25T14:14:47.280+08:00Establishing a Trust Fund using Insurance or Takaful Funds<p> </p><p class="MsoNormal"><br /></p>
<p class="MsoNormal"></p><p class="MsoNormal" style="text-align: justify;"><b><i><span lang="EN-US" style="mso-ansi-language: EN-US;">Summary of features of the arrangement.<o:p></o:p></span></i></b></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-style: normal; font-variant: normal; line-height: normal;"><b> </b></span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;"><b>Objective</b>:
To create a fund upon the death of a policy owner (PO) or participant (P),
whereby the moneys are professionally managed by trust company. It is to be
gifted to the beneficiaries over a period of time, according to the wishes and
intention of the PO or P.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The
PO or P must create the fund by purchasing a suitable life insurance policy or family
takaful contract. The initial sum assured will represent the basic fund value.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">Discussions
must be held with a chosen trust company (trustee) as to the intentions of the
PO or P (settlor) and all the relevant terms and conditions of the trust which
will be stated in the trust deed which will be prepared by the trust company.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">A
trust deed is therefore an agreement between the settlor and the trustee.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="text-align: justify;"><span lang="EN-US" style="mso-ansi-language: EN-US;"><o:p> </o:p></span><span lang="EN-US" style="text-indent: -18pt;">As
part of the arrangement, the policy or contract must be absolutely assigned to
the trustee.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">6.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span lang="EN-US" style="mso-ansi-language: EN-US;">There
are initial fees and expenses to be paid to the trustee and when the claim
arises, management fees and expenses will be charged. This will depend on the
trust company.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">7.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The
trust funds thus established, will not be considered as part of the estate of
the policy owner.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">8.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The
trust created will usually be an irrevocable trust ie. it cannot be revoked
without the consent of the trustees.</span> </p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span lang="EN-US" style="mso-ansi-language: EN-US; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">9.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span lang="EN-US" style="mso-ansi-language: EN-US;">The
fund established may only be deemed “creditor proof” only if it satisfies the
relevant bankruptcy rules – as an example and in simplest terms, the trust
should be created at least 5 years prior to any bankruptcy proceedings
commenced against of the settlor.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="text-align: justify;"><span lang="EN-US" style="mso-ansi-language: EN-US;"><o:p> </o:p></span><span lang="EN-US" style="text-indent: -18pt;">The
documents required for this arrangement include an absolute assignment, a trust
deed, a power of attorney and others as required by the trust company.</span></p><br /><p></p>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-65154402650618410162021-09-25T14:08:00.000+08:002021-09-25T14:08:39.432+08:00Social Guarantors and bankruptcy<p> </p><p class="MsoNormal"><b><span style="background: white; color: #202124; font-family: "Arial",sans-serif;">Social guarantors and bankruptcy…<o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="background: white; color: #202124; font-family: "Arial",sans-serif;"><o:p> </o:p></span></p>
<p class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="color: #202124; font-family: "Arial",sans-serif; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="background: white; color: #202124; font-family: "Arial",sans-serif;">When a
person takes a loan from a bank, it will usually require one or more persons to
be guarantors.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="color: #202124; font-family: "Arial",sans-serif; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="background: white; color: #202124; font-family: "Arial",sans-serif;">If the
borrower defaults on the loan, the bank may eventually proceed to take legal
action to recover the debt. If it succeeds, it will obtain a judgement order
from the courts.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="color: #202124; font-family: "Arial",sans-serif; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="background: white; color: #202124; font-family: "Arial",sans-serif;">Upon
obtaining the judgement order, the bank will proceed to enforce it against the
borrower or the guarantor or the both of them. Very often, when it is
determined that the borrower is unable to repay the loan, the bank will seek to
enforce the judgement against the guarantor.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="color: #202124; font-family: "Arial",sans-serif; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="background: white; color: #202124; font-family: "Arial",sans-serif;">There are
several ways to enforce the judgement and if the debt exceeds the minimum
amount of RM 100 000 effective 23<sup>rd</sup> October 2020 (this is expected to be a year only), (previously RM 50
000 and prior to that RM 30 000), the bank may initiate a creditor’s petition
for bankruptcy against the guarantor.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="color: #202124; font-family: "Arial",sans-serif; mso-fareast-font-family: Arial;"><span style="mso-list: Ignore;">5.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="background: white; color: #202124; font-family: "Arial",sans-serif;">In the
past, many individuals were declared bankrupt because of such circumstances. However,
after 6<sup>th</sup> October 2017 when the Bankruptcy Act amendments came into
effect, creditors are prohibited from commencing bankruptcy proceedings against
“social guarantors”.<o:p></o:p></span></p>
<p class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-align: justify; text-indent: -18.0pt;"><!--[if !supportLists]--><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">6.<span style="font: 7.0pt "Times New Roman";"> </span></span></span><!--[endif]--><span style="background: white; color: #202124; font-family: "Arial",sans-serif;">Social
guarantors are persons who are said not to have profited from the loans taken
by borrowers, for which they stood as guarantors including education
loans, hire purchase loans for personal or non-business uses, and housing loans
for personal dwelling.</span><o:p></o:p></p>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-30393377081629487682019-08-27T07:48:00.000+08:002019-08-27T07:48:11.552+08:00Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-29388393509911511852018-11-14T11:26:00.000+08:002018-11-14T11:26:06.329+08:00<br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; mso-outline-level: 1;">
<b><span style="color: black; font-family: "inherit",serif; font-size: 27.0pt; letter-spacing: .4pt; mso-bidi-font-family: Arial; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-MY; mso-font-kerning: 18.0pt;">Budget 2019: Separation of tax relief good move, says LIAM<o:p></o:p></span></b></div>
<div align="center" class="MsoNormal" style="line-height: normal; text-align: center;">
<span style="color: black; font-family: "Arial",sans-serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-MY;">
<hr align="center" size="0" style="width: 75.0pt;" width="100" />
</span></div>
<div class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 16.2pt; margin-bottom: 6.0pt; margin-left: 0in; margin-right: 0in; margin-top: 0in; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-indent: -.25in;">
<!--[if !supportLists]--><span style="color: #4a4a4a; font-family: Symbol; font-size: 10.0pt; mso-bidi-font-family: Symbol; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Symbol; mso-fareast-language: EN-MY;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="color: #4a4a4a; font-family: "Arial",sans-serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-MY;">The Star- Friday, 2 Nov 2018<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div style="background: #DAE4EF; border: solid #D6D6D6 1.0pt; mso-border-alt: solid #D6D6D6 .75pt; mso-element: para-border-div; padding: 4.0pt 8.0pt 4.0pt 8.0pt;">
<div class="MsoNormal" style="background: #DAE4EF; border: none; line-height: 14.75pt; mso-border-alt: solid #D6D6D6 .75pt; mso-padding-alt: 4.0pt 8.0pt 4.0pt 8.0pt; padding: 0in;">
<b><span style="color: #4a4a4a; font-family: "Arial",sans-serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-MY;">LIAM president
Anusha Thavarajah said on Friday the insurance body supported the separation
into RM 4,000 for EPF and RM 3,000 for life insurance/takaful.<o:p></o:p></span></b></div>
</div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="color: black; font-family: "Arial",sans-serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-MY;">KUALA LUMPUR: The Life Insurance Association of Malaysia (LIAM) welcomes
the tax relief on the separation of EPF and the life insurance/takaful as
proposed by the government.<br />
<br />
LIAM president Anusha Thavarajah said on Friday the insurance body supported
the separation into RM 4,000 for EPF and RM 3,000 for life insurance/takaful.<br style="mso-special-character: line-break;" />
<!--[if !supportLineBreakNewLine]--><br style="mso-special-character: line-break;" />
<!--[endif]--><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="color: black; font-family: "Arial",sans-serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-MY;">Previously, tax relief was RM 6,000 for EPF and life insurance/takaful
combined.<br />
<br />
“This tax relief separation, we believe, will give life insurance the right
focus and encourage individuals to purchase life insurance as a form of
protection that is critical for all Malaysians. <br style="mso-special-character: line-break;" />
<!--[if !supportLineBreakNewLine]--><br style="mso-special-character: line-break;" />
<!--[endif]--><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="color: black; font-family: "Arial",sans-serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-MY;"><span style="mso-spacerun: yes;"> </span>“The savings in the EPF will meet
individuals’ retirement needs while life insurance will ensure that the family
is financially protected if the breadwinner meets with an unfortunate event,”
she said.<br />
<br />
Anusha said based on Bank Negara Malaysia's 2016 BNM Financial Stability and
Payment Systems Report, the penetration rate of insurance and takaful was about
55% for the past five years.<br />
<br />
Eliminating multiple ownership of life insurance/takaful policies, this figure
reduces to 35% of population insured.<br />
<br />
Out of this, only 4% of households in the lower income group has some form of
life insurance/takaful cover.<br />
<br />
“Therefore, the separation of the EPF and life insurance tax relief would
certainly benefit the rakyat by encouraging them to buy life insurance for
themselves and their loved ones and help to increase Malaysia’s insured
population to 75%,” she said.<br />
<br />
Anusha also said LIAM thanked the government for waiving the stamp duty for the
purchase of Perlindungan Tenang products.<br />
<br />
“This is extremely encouraging as Perlindungan Tenang products have been
specially developed to incentivise the youth, young families and B40 household
segment to purchase life insurance,” it said.<br />
<br />
The premiums for Perlindungan Tenang products has been specially priced at
premiums from as low as RM3 per month.<br />
<br />
“We welcome the public private partnership announced by the Government via the
setting up of a Critical Illness Fund called Dana Perlindungan Kesihatan
Nasional B40,” she said.<br />
<br />
Finance Minister Lim Guan Eng, had in his Budget speech, emphasised insurance
and takaful could act as a safety net by providing financial support and
enabling households to get back on their feet especially for the lower income
groups.<br />
<br />
“In partnership with the private insurance industry, the Government will pilot
a national B40 Health Protection Fund to provide free protection against top 4
critical illness for up to RM8,000 and up to 14 days of hospitalisation income
cover at RM50 per day starting Jan 1, 2019. In other words,
hospitalisation income of RM700 per annum is available.<br />
<br />
Great Eastern Life Insurance has agreed to contribute the initial seed funding
of RM2bil to this Fund to be managed by Bank Negara Malaysia. <br />
<br />
Lim said the government expects the fund size to grow with more partnership and
contributions with other insurance companies.<br />
<br />
“This is a big step for Malaysia because for the very first time, together with
the Employees Provident Fund and the Social Security Organisation, we are
starting a more comprehensive social welfare protection coverage, particularly
for the middle- and lower-income groups,” he said.<o:p></o:p></span></div>
<br /><br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com14tag:blogger.com,1999:blog-9138656636828375102.post-20457638057586241652018-11-07T13:47:00.000+08:002018-11-07T13:47:25.923+08:00Identifying Insurance & Takaful Needs of Business Owners<div class="MsoNormal" style="text-align: center;">
<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 107%;"><span style="font-family: "georgia" , "times new roman" , serif;">In identifying insurance and takaful needs for business
owners we need to be aware that in Malaysia, there are now four basic business
organizations. They are sole-proprietorships, general partnerships, limited
liability partnerships (introduced in 2012) and of course companies.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 107%;"><span style="font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 107%;"><span style="font-family: "georgia" , "times new roman" , serif;">The death of owners of each of these businesses will give
rise to several types of specific challenges to the families, as well as their
fellow owners in the case of partnerships and companies. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-size: 12.0pt; line-height: 107%;"><span style="font-family: "georgia" , "times new roman" , serif;">Insurance and takaful solutions, carefully planned and
arranged, can definitely minimise these problems and difficulties which will
affect all the concerned parties. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "georgia" , "times new roman" , serif;"><span style="font-size: 12pt;">There are </span><b style="font-size: 12pt;">4 main
objectives</b><span style="font-size: 12pt;"> in these types of arrangements and they are as follows:</span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
</div>
<ol>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">To
provide for the continuity of the businesses;</span></li>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">To
minimise the loss of a “Key-Person” in the business organisation (this is most
commonly seen in limited companies);</span></li>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">To
avoid partners of general partnerships and directors of limited companies
becoming liable for the debts of their businesses upon the death of a specific
individuals; and</span></li>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">To
provide incentives to directors or selected individual in providing
“benefits-in kind”.</span></li>
</ol>
<br />
<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "georgia" , "times new roman" , serif; font-size: 12pt;">To promote these insurance and takaful solutions to business
owners so that suitable funds are made available, intermediaries must know the:</span></div>
<div class="MsoNormal" style="text-align: justify;">
</div>
<ol>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">Appropriate
approach and presentation skills, as well as the relevant knowledge of business
organizations and their structures;</span></li>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">Legal
and estate planning principles involved upon the death of business owners;</span></li>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">Tax
implications involved, both of the premiums or contributions, as well as the
death claims or benefits payable in insurance and takaful contracts;</span></li>
<li style="text-align: justify;"><span style="font-family: "georgia" , "times new roman" , serif;">Specific
agreements (prepared by lawyers) among the relevant parties to be arranged when
necessary.</span></li>
</ol>
<div style="text-align: justify;">
<span style="font-family: "georgia" , "times new roman" , serif;">Detailed knowledge and study of the
above would require two to four-day interactive workshop sessions. It is
pleasing to know that several insurance companies, takaful operators,
educational institutions and organisations in the industry are placing greater
emphasis on such types of trainings and making it available to intermediaries.</span></div>
<div style="text-align: justify;">
<br /></div>
</div>
Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com5tag:blogger.com,1999:blog-9138656636828375102.post-35749503284830933362018-10-25T10:21:00.002+08:002018-10-25T10:21:28.801+08:00Nominations in Life Insurance and Family Takaful Contracts<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">The legal principles that are applicable to the issues of nominations and the payment of claims are regulated by the Financial Services Act (‘FSA’) 2013 and the Islamic Financial Services Act (‘IFSA’) 2013. These principles also apply to Personal Accident contracts. One of the more common issues when it comes to the payment of claims is whether the named nominee is entitled to keep the moneys paid out or whether they are under a duty to distribute to others. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<br />
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">The following are some fundamental aspects of nominations and claims which all those involved in the industry are recommended to be familiar with:</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">1. If there is a valid death claim, the named nominee must be paid the full proceeds by the insurer or operator.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">2. The word ‘nominee’ is used when a policy owner buys a policy on his own life and appoints the named nominee to receive the death claim proceeds. Similarly, this principle applies to a participant in a takaful contract.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">3. Insurance companies and takaful operators require the relationship between the policy owner and the nominee to be stated in the contract, but this is not a requirement by the FSA or IFSA.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">4. Although it is routine for the Claims Departments to request for ‘proof of relationship’ between the policy owner and the nominee, a claim cannot be denied or withheld merely because the claimant cannot provide this ‘proof’.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">5. Appointing a person as a nominee, has nothing to do with insurable interest, as the latter is a requirement only when a person buys an insurance or takaful contract on the life of another.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">6. Payment of death claim proceeds to nominees must be noted as a ‘two-stage process’. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"> i) Firstly, it is for the insurer or operator to pay out the claim to the nominee.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"> ii) Secondly, the nominee who receives the moneys or benefits may sometimes keep the moneys for himself and in some situations the law imposes a duty on the nominee to distribute them to others. </span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">7. If the nominee, upon receiving the death claim moneys has a right to keep the moneys for himself, he is deemed to be the ‘beneficiary’. This is seen in a life insurance trust policy or in the case of a conditional <i>hibah</i> in a takaful contract.</span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">8. If the nominee has a duty by law to distribute the money to others, he is deemed to be the ‘executor’. This happens in circumstances when the nominee is one who is named in a ‘non-trust’ policy, whereby the moneys have to be distributed according to the instructions set out in a Will or as per the Distribution Act 1958. For Muslim participants of takaful contracts, the executor has to distribute the benefits in accordance with the <i>Faraid</i> rules.</span></div>
<div style="text-align: justify;">
<br /></div>
Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com5tag:blogger.com,1999:blog-9138656636828375102.post-91029268714524009412018-10-22T17:35:00.003+08:002018-10-22T17:35:55.611+08:00My thoughts on Success and the Whole-Person Concept <br />
<div class="MsoNormalCxSpFirst" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<br /></div>
<div class="MsoNormalCxSpMiddle" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span lang="EN-GB" style="font-family: "Georgia",serif; letter-spacing: .5pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Arial;">Ideas and definition of
success<o:p></o:p></span></i></b></div>
<div class="MsoNormalCxSpMiddle" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia",serif; letter-spacing: .5pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Arial;">When
talking about success, one must look into the various aspects of our lives and
this is summarised in the well-known principle of the “Whole Person” concept.
An individual who chooses any one of these various aspects of our daily life
and makes a decision to excel in it, is on the way to becoming a success. In
this pursuit, one must always keep the other aspects of one’s life in
perspective and balance. One cannot neglect or ignore any one of them. To cite
an example, a man who earns a high level of income (financial) cannot be
considered successful if in the process, he has to neglect his family or health
(physical).<o:p></o:p></span></div>
<div class="MsoNormalCxSpMiddle" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<br /></div>
<div class="MsoNormalCxSpMiddle" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;"><span lang="EN-GB" style="font-family: "Georgia",serif; letter-spacing: .5pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Arial;">Principles to observe to
achieve success<o:p></o:p></span></i></b></div>
<div class="MsoNormalCxSpMiddle" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia",serif; letter-spacing: .5pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Arial;">Although
living a balanced life-style is very important, it is also necessary that we
should have one single dominant goal at any one “period of time” in our lives.
This goal must be more important than our other aspirations at “this”
particular phase of our life. At a later period of our life and after having
achieved the required level of success in our chosen goal, we may choose
another goal which may be totally different from our earlier choice. A common
example would be a young person who has just begun his working career, when the
early years may be devoted to achieving his financial goals for himself and his
family. Having reached a certain level of income, he may choose to further his
studies (mental development). Having changed his dominant goals, he will have
to put in more effort, time and energy to succeed in his studies at this stage
of this life. <o:p></o:p></span></div>
<div class="MsoNormalCxSpMiddle" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<br /></div>
<div class="MsoNormalCxSpMiddle" style="margin-right: 9.0pt; mso-add-space: auto; text-align: justify;">
<span lang="EN-GB" style="font-family: "Georgia",serif; letter-spacing: .5pt; mso-ansi-language: EN-GB; mso-bidi-font-family: Arial;">In the
pursuit of our goals, we must be passionate about them. Human beings are
motivated by emotions rather than logic. As a consequence, if we can harness
our positive emotions and become passionate about our chosen goals, it will be
far easier to achieve them. This principle is understood only by a few and should
be taught and highlighted in self-help seminars and workshops. It is definitely
a very important ingredient in the search of our own success.</span></div>
Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com1tag:blogger.com,1999:blog-9138656636828375102.post-24434125276756910682018-10-22T17:30:00.004+08:002018-10-22T17:31:58.231+08:00Nominations & Claims - My Latest Book Is Now Available<div style="text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgz2Kc15PxSZ4KkS8lNvAm-W8g0pV61VmMT1K6frRXnuJ7GYbqzKd63KBNH9AkwaQ8UXV4h7t-w26NGQVABy8jsC4bRmerc0hm_0yESJtOcNCR1IAxJVvYJCxoQ2X9nUotWkDy-1hCYbM/s1600/Nominations+%2526+Claims+Front+Cover.jpeg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="583" data-original-width="411" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgz2Kc15PxSZ4KkS8lNvAm-W8g0pV61VmMT1K6frRXnuJ7GYbqzKd63KBNH9AkwaQ8UXV4h7t-w26NGQVABy8jsC4bRmerc0hm_0yESJtOcNCR1IAxJVvYJCxoQ2X9nUotWkDy-1hCYbM/s400/Nominations+%2526+Claims+Front+Cover.jpeg" width="281" /></a><span style="background-color: white; color: #222222;"><span style="font-family: "georgia" , "times new roman" , serif; font-size: large;">Published in August 2018, this Handbook is a useful guide for all those involved in the Insurance & Takaful Industry. The book focuses on Schedule 10 of both the FSA and IFSA 2013 and and the information is presented in an "easy to understand" Q and A style. It is intended to be a guide to all and may be used as a training handbook for this subject.</span></span></div>
<div class="gmail_default" style="background-color: white; color: #222222; text-align: justify;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVL1qpHEC1JUEBTE10OL5Iv_VhC_Tb4rxTB01k_-ys3Fkjpg9rJD3sKRaSZc4VxWrhL4oOCUqIqyiu_aIBkwy3b8Ewzf8AoKF2NYFKgayjv9Dtgm2mZkOxSDJNWKtyKJp_MRr8ynTZzkE/s1600/Nominations+%2526+Claims+Back.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" data-original-height="585" data-original-width="416" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVL1qpHEC1JUEBTE10OL5Iv_VhC_Tb4rxTB01k_-ys3Fkjpg9rJD3sKRaSZc4VxWrhL4oOCUqIqyiu_aIBkwy3b8Ewzf8AoKF2NYFKgayjv9Dtgm2mZkOxSDJNWKtyKJp_MRr8ynTZzkE/s400/Nominations+%2526+Claims+Back.jpeg" width="282" /></a><span style="font-family: "georgia" , "times new roman" , serif; font-size: large;"><br /></span></div>
<div class="gmail_default" style="background-color: white; color: #222222; text-align: justify;">
<span style="font-family: "georgia" , "times new roman" , serif; font-size: large;"><br /></span>
<span style="font-family: "georgia" , "times new roman" , serif; font-size: large;"><br /></span>
<span style="font-family: "georgia" , "times new roman" , serif; font-size: large;"><br /></span>
<span style="font-family: "georgia" , "times new roman" , serif; font-size: large;"><br /></span><br />
<span style="font-family: "georgia" , "times new roman" , serif; font-size: large;"><br /></span>
<span style="font-family: "georgia" , "times new roman" , serif; font-size: large;">The book is priced at RM 45.00 per copy. Please email for inquiries or to place your orders! </span></div>
<div class="gmail_default" style="background-color: white; color: #222222; font-family: arial, helvetica, sans-serif; font-size: small;">
<br /></div>
Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com2tag:blogger.com,1999:blog-9138656636828375102.post-5578243957869614022018-10-22T17:26:00.002+08:002018-10-22T17:26:38.705+08:00Upcoming Workshop - Insurance & Takaful Benefits for Business Owners - Register Now!<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIf7t51RoGBmVbAIX85LsxILU3I__HWUrMAPLgvYoy_ZGv8UBy_IVRFcSCNL3vJPlbBn_RQ3724AYUUYX7ACsL_CGt8_uKf-WIX4r7vHRDFf3uThkuTTYr5eiPhrsmZ4Ict-8KbNDwS7E/s1600/Brochure_Form+ITBFBO+13112018-page-001.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1132" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIf7t51RoGBmVbAIX85LsxILU3I__HWUrMAPLgvYoy_ZGv8UBy_IVRFcSCNL3vJPlbBn_RQ3724AYUUYX7ACsL_CGt8_uKf-WIX4r7vHRDFf3uThkuTTYr5eiPhrsmZ4Ict-8KbNDwS7E/s640/Brochure_Form+ITBFBO+13112018-page-001.jpg" width="452" /></a></div>
<br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com2tag:blogger.com,1999:blog-9138656636828375102.post-63240626463586102452018-10-22T17:25:00.002+08:002018-10-22T17:25:25.799+08:00Workshop on Sales Ideas in Life Insurance & Family Takaful Law<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTXJDqKXc_qUl54YRZ1V3XI97ftXcE6IM1nUDIkj0eV3oxvBZ3O8SE6ojwZ-ZI_CYVaaH2oedY7-b5nI0LqyHixCKuksWbD4kmPH0783X05_al_-u4KnsdU1PDZTPQ4XaIAjUwjK_uG2c/s1600/SILIFTL+-+Brochure+%2526+Form-page-001.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1600" data-original-width="1132" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjTXJDqKXc_qUl54YRZ1V3XI97ftXcE6IM1nUDIkj0eV3oxvBZ3O8SE6ojwZ-ZI_CYVaaH2oedY7-b5nI0LqyHixCKuksWbD4kmPH0783X05_al_-u4KnsdU1PDZTPQ4XaIAjUwjK_uG2c/s640/SILIFTL+-+Brochure+%2526+Form-page-001.jpg" width="452" /></a></div>
<br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com6tag:blogger.com,1999:blog-9138656636828375102.post-33826433744791960102016-04-17T10:21:00.000+08:002016-04-17T10:21:16.374+08:00Upcoming Workshop - FULLY BOOKED! <div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbsgdhSuvojBsimXvMw6CiIfwLBELNf5BAKvGjMVYoD5Lpu72u_f7JphCvg7QJ3_4WTu86EuapUwB1MiE1NACvAG-5qoceqF6Vpl3epd-TCyEP_ni2t540T8EddctK9qGmddZQXYS5tGU/s1600/Insurance+Solutions+for+High+Net-Worth+Individuals+%25281%2529-page-001.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbsgdhSuvojBsimXvMw6CiIfwLBELNf5BAKvGjMVYoD5Lpu72u_f7JphCvg7QJ3_4WTu86EuapUwB1MiE1NACvAG-5qoceqF6Vpl3epd-TCyEP_ni2t540T8EddctK9qGmddZQXYS5tGU/s640/Insurance+Solutions+for+High+Net-Worth+Individuals+%25281%2529-page-001.jpg" width="480" /></a></div>
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<br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-88756862673667895892016-04-17T10:17:00.004+08:002016-04-17T10:18:01.975+08:00International Claims Convention 2016<div class="separator" style="clear: both; text-align: center;">
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<br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com1tag:blogger.com,1999:blog-9138656636828375102.post-78852766143106785342015-07-19T18:58:00.003+08:002015-07-20T15:32:43.144+08:00FSA & IFSA - Impact on Death Claims (Published in Insurance magazine by the Malaysian Insurance Institute)<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="MsoNormal" style="margin: 0cm 0cm 10pt; text-align: justify;">
<span lang="EN-US" style="font-size: 14pt; line-height: 115%;"><span style="font-family: Calibri;">FSA & IFSA – Impact on Death
Claims<o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">The Financial Services Act 2013 (FSA)
and the Islamic Financial Services Act 2013 (IFSA), both of which have made a
significant impact on the insurance and Takaful industry, came into effect on
30<sup>th</sup> June 2013. As is common knowledge by now, the FSA repealed four
legislations. Amongst the most importance of this was the Insurance Act of 1996
(IA 1996). Similarly, the IFSA repealed the Takaful Act 1984. These two
legislations have been described as mirror images of each other because of the
similar provisions of law contained therein. However there is one significant
difference: the IFSA provides for legislation to be compliant where relevant,
to Islamic law and Shariah principles. These statutory provisions and rules are
of course, particularly significant to the Takaful industry. The operational
aspects of <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>the law dealing with insurance policy
contracts and Takaful certificates can be found Schedules 8, 9 and 10 in both
the respective Acts.<o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Although the principles of many of
the provisions in these schedules have been retained from the previous
legislations, there are nevertheless significant changes in some important
areas of the law. This article seeks to discuss those provisions that
particularly relate to the payment of death claims in insurance policies and Takaful
contracts. To have an easy understanding, the provisions of the FSA on this
topic will be discussed first, followed in the second part by that of the IFSA.<o:p></o:p></span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">FSA 2013<o:p></o:p></span></span></b></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">The rules for payment of death claims
for life and personal accident insurance policies under the FSA , <span style="mso-spacerun: yes;"> </span>where the policy owner is also the insured
life and has named<span style="mso-spacerun: yes;"> </span>a nominee, is
generally the same. Thus, if a claim is deemed valid, it is mandatory for the
insurer to pay the claim proceeds to a named nominee. The significant change imposed
by the FSA is seen in “trust policies”. <span style="mso-spacerun: yes;"> </span>A
trust policy is one whereby a non-Muslim policy owner takes up an insurance
policy on his own life and names either the spouse, children or parents as nominees.
The benefit of such a trust is that the death claim proceeds do not form part
of the estate of the deceased and are thereby not subject to the claims of
creditors. Whereas previously the law was silent as to who can be appointed as
a trustee, the FSA now directs that the policy owner cannot name himself as a
trustee or be deemed as one. The appointment of trustees in trust policies has
always been optional. The role of trustees in insurance trust policies being (during
the lifetime of the policy owner), to give consent to contractual changes
whenever applied by the policy owner to the insurer.<o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Prior to the FSA, insurers adopted
one of two practices when no trustee was appointed in the policy and when
consent was required. Some insurers deemed the named nominee in the policy as
the trustee (“presumed trustee”) while others considered the policy owner as
the trustee (“default trustee”). The Act now only recognizes the concept of
“presumed trustees”. This means that in the absence of a trustee being (expressly)
appointed by the policy owner, the consent of such named nominees are required
when the policy owner applies to make contractual changes to the insurer. Upon
the death of the policy owner however, the law remains the same in that the
claim proceeds are made to the appointed trustee or in the absence of one, to
the competent nominees.<o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Other notable differences introduced by
the FSA are as follows:<o:p></o:p></span></span></div>
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<!--[if !supportLists]--><span lang="EN-US" style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">i)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">If there is no nominee
named in the policy or it is deemed that there is no nominee named in the
policy contract</span></b><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">As a general rule the insurer will request for a grant of representation
i.e. probate, letters of administration, a distribution order by the land office
or Public Trustee Berhad (Amanah Raya Berhad). The insurer is however, given a
discretion to make payments directly to the beneficiaries of the estate according
to their beneficial rights as allowed by the law. This distribution process will
follow the rules as provided in the Distribution Act 1958 (as amended by the
1997 Act), the Intestate Succession Ordinance 1960 (Sabah) or the <i style="mso-bidi-font-style: normal;">Faraid </i>rules for Muslims.<o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;"><span style="mso-spacerun: yes;"> </span>It is strongly believed that
insurers will not undertake the “cumbersome process” and responsibility to
determine the rightful beneficiaries and pay out the claim accordingly.
Previously, under these circumstances, the IA 1996 permitted the insurer to pay
to one or more individuals and placed the burden and responsibility on them to
distribute the moneys to the rightful beneficiaries. In making payments to such
individuals, the insurer was deemed to have received a proper discharge of
their responsibility.<o:p></o:p></span></span></div>
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<!--[if !supportLists]--><span lang="EN-US" style="font-size: 12pt; line-height: 115%; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;"><span style="font-family: Calibri;">ii)</span><span style="font-size-adjust: none; font-stretch: normal; font: 7pt/normal "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">Interest on late payments</span></b><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">. <b style="mso-bidi-font-weight: normal;"><o:p></o:p></b></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Insurers
are required by the law to pay interest for late payments of death claims, for
policies which were on the life of the deceased policy owner. A payment is
considered late if it is paid out after 60 days of notification of the death to
the insurer. Such interest will accrue irrespective of the reasons that caused
the delay. This rule was introduced by the IA 1996 and is retained in the FSA.
The rate of interest has however, been changed by the FSA. Whereas previously
it was “.... a minimum compound interest of 4%<span style="mso-spacerun: yes;">
</span>per annum or other such rate as may be prescribed....”, it is now “....
a minimum compound interest at the average fixed deposit rate applicable for
the period of 12 months for licensed banks as published by Bank Negara Malaysia
plus one percent or other rates as may be specified....” . Thus, based on
current rates the interest payable by insurers for late payments is definitely
higher than 4 %.<o:p></o:p></span></span></div>
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<span style="font-family: Calibri;"><b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;">IFSA 2013</span></b><span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">The payment of death claims to
nominees in Takaful contracts has been significantly changed by the IFSA.
Traditionally, a nominee who received death claim proceeds had a duty and responsibility
to distribute them according to relevant laws of distribution. In the case of
Muslims for example, these moneys were often expected to be distributed
according to the <i style="mso-bidi-font-style: normal;">Faraid</i> rules.<span style="mso-spacerun: yes;"> </span>If a Takaful participant had written a Will,
whether Muslim or Non- Muslim, the terms of the Will would apply (subject to
the relevant limitations for Muslims). Under the IFSA however, a participant is
given the additional option to declare that the nominee is to receive the
moneys as a beneficiary of a conditional <i style="mso-bidi-font-style: normal;">hibah.<o:p></o:p></i></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">A nominee receiving these moneys as a
<i style="mso-bidi-font-style: normal;">hibah</i> or gift is entitled to the full
proceeds and has no obligation to distribute it to any other beneficiaries of
the estate. Moreover, the moneys received “shall not form part of the estate of
the deceased Takaful participant or be subject to his debts”. This effectively makes
the death claim benefits a “ creditor proof “ source of funds for the named
nominee . In life insurance contract this privilege was given only to trust
policies and that too, to selected nominees of Non - Muslim policy owners,
namely, spouse, children and in some cases parents. As for Takaful
participants, be they Muslims or Non- Muslims, the beneficiaries of a
conditional <i style="mso-bidi-font-style: normal;">hibah</i> can be any natural
person and is not necessarily restricted to family members. Moreover, the IFSA
does not prescribe any restrictions or conditions if the certificate holder
decides to change his nominee. <span style="mso-spacerun: yes;"> </span>From a
marketing point of view all these benefits <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>allow for
very powerful sales ideas! <o:p></o:p></span></span></div>
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<span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">On the subject matter of delayed
payment of death claims, the rules specified in the IFSA are very much similar
to the FSA as stated above, with the following exception on the quantum, the “Takaful
operator shall pay a minimum compensation at the rate of investment yield of
the participant’s risk fund plus one percent or such other rate as may be
specified by Bank Negara Malaysia....”.<o:p></o:p></span></span></div>
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<i style="mso-bidi-font-style: normal;"><span lang="EN-US" style="font-size: 12pt; line-height: 115%;"><span style="font-family: Calibri;">Author’s
note: The discussion above is based on the relevant the provisions of Schedule
10 of the FSA and IFSA respectively . The main changes in the law and the
consequent impact have been highlighted while other details which have not seen
significant changes, are not discussed.<o:p></o:p></span></span></i></div>
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<br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com2tag:blogger.com,1999:blog-9138656636828375102.post-2171398468942636722015-05-07T14:15:00.001+08:002015-05-07T14:17:51.620+08:00NEW WORKSHOP! 10th June 2015 - The FSA & IFSA Insurance and Family Takaful<div class="separator" style="clear: both; text-align: center;">
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Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com2tag:blogger.com,1999:blog-9138656636828375102.post-89340847365983292672015-05-07T13:37:00.001+08:002015-05-07T13:37:37.407+08:00<div style="text-align: center;">
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<span style="color: black;"><b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Bookman Old Style",serif; font-size: 14pt; mso-bidi-font-family: Arial;">Assignments and the Need for Conditional
Assignments</span></b><b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-family: "Arial",sans-serif; font-size: 14pt;"><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-tab-count: 1;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></b></span></div>
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<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">An Assignment Deed is a legal instrument
that transfers the ownership of an asset from the owner to another.<o:p></o:p></span></span></span></div>
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 14pt;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></b></div>
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<span style="height: 15px; left: 0px; margin: 56px auto auto 275px; mso-ignore: vglayout; position: absolute; width: 78px; z-index: 251657728;"><span style="color: black; font-family: Times New Roman; font-size: small;"><img height="15" src="file:///C:/Users/PRAVEE~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.gif" v:shapes="_x0000_s1026" width="78" /></span></span><!--[endif]--><b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;"><span style="mso-spacerun: yes;"> </span>ASSIGNOR<span style="mso-spacerun: yes;"> ----------------</span><span style="mso-spacerun: yes;"> </span>ASSIGNEE<o:p></o:p></span></span></span></b></div>
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;"><span style="mso-tab-count: 2;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>(Owner)<span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>(New
owner)<o:p></o:p></span></span></span></b></div>
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<b style="mso-bidi-font-weight: normal;"><span lang="EN-US" style="font-size: 14pt;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></b></div>
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<span lang="EN-US" style="font-size: 14pt;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
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<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">A life insurance policy is recognized
as an asset of an individual and thereby its ownership is generally allowed to
be transferred to another by an assignment deed. Upon an assignment being
effected, it is a complete transfer of ownership and cannot be withdrawn by the
assignor. However, (just like any other asset), the assignee can transfer the
ownership back to the assignor if he/she wishes to do so. This is effected by
means of a “Reassignment” or “Revocation” of the assignment as practiced by
insurance companies.<o:p></o:p></span></span></span></div>
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<span lang="EN-US" style="font-size: 14pt; line-height: 150%;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
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<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">When an insurance policy is
assigned, the benefits in the policy (unless specifically excluded in the
policy contract) are payable to the assignee. These benefits would include cash
bonuses, survival benefits, loans, surrender or maturity proceeds and of course
death claim proceeds. Hence, such assignments have been <span style="mso-spacerun: yes;"> </span>labeled as <b style="mso-bidi-font-weight: normal;">“Absolute Assignments”</b>.<o:p></o:p></span></span></span></div>
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<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="line-height: 150%; margin: 0cm -16.55pt 0pt -18pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt; line-height: 150%;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
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<span style="color: black; font-family: Times New Roman; font-size: small;">
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<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">It is believed that in the
early 1960s, some life insurers created a “modified assignment” and called this
instrument a “<b style="mso-bidi-font-weight: normal;">Conditional Assignment”</b>.
This instrument was probably created because the laws prevailing at that time
did not allow a beneficiary to be legally entitled to the proceeds of an
insurance policy and could only make a claim if the Grant of Probate or Letters
of Administration of the deceased’s estate were produced. <b style="mso-bidi-font-weight: normal;">Section</b> <b style="mso-bidi-font-weight: normal;">44 </b>of the
Insurance Act 1963 was later introduced as an amendment (in 1983), to allow
beneficiaries to receive all or part of the death claim proceeds under certain
conditions. Thus, the object of the Conditional Assignment at that time was to
allow the policy owner (the assignor) to give the entire death claim proceeds
to the beneficiary (an assignee) without the need for Grant of Probate or
Letters of Administration. The situation had changed because <b style="mso-bidi-font-weight: normal;">Section 165(1)</b> of the Insurance Act
1996 and now <b style="mso-bidi-font-weight: normal;">Para 4 of Schedule 10 of
the FSA 2013</b><span style="mso-spacerun: yes;"> </span>makes it mandatory for
the insurer to pay the entire death claim proceeds to the named nominee(s) in a
insurance policy. <o:p></o:p></span></span></span></div>
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<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="line-height: 150%; margin: 0cm -16.55pt 0pt -18pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt; line-height: 150%;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">The FSA 2013, in directing
insurers to pay death claim proceeds to the nominees directly, further
stipulates that some of them are not entitled to these moneys beneficially. <b style="mso-bidi-font-weight: normal;">Para 2(4) Schedule 10 </b>states “<i style="mso-bidi-font-style: normal;">The licensed insurer shall prominently
display in the nomination form that the policy owner has to assign the policy
benefits to his nominee if his intention is for his nominee, other than his
spouse, child or parent to receive the policy benefits beneficially and not as
an executor;…….”<o:p></o:p></i></span></span></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">The words used in this
statutory provision i.e. <b style="mso-bidi-font-weight: normal;">“assign the
policy benefits”</b> clearly directs the insurer to allow the policy owner to
assign the policy benefits and <b style="mso-bidi-font-weight: normal;">not </b>necessarily
the ownership of the policy.<o:p></o:p></span></span></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">Thus, it is now onerous on
the insurer to create an assignment that provides for nominees, who are other
than spouse, children and sometimes parents (commonly called “non-trust
nominees”), to receive death claims beneficially and not merely as <b style="mso-bidi-font-weight: normal;">executors</b> as provided in Para 6(3) of
the FSA 2013. This provision again uses the words “policy moneys “and not
“policy” with regards to assignments.<o:p></o:p></span></span></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="line-height: 150%; margin: 0cm -16.55pt 0pt -18pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt; line-height: 150%;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">Therefore, a “Conditional
Assignment” is now necessary to give “non-trust nominees” beneficial interest
in the death claim proceeds of both life and personal accident insurance policies.
Such an assignment may be provided by the insurers as “standard forms” or
drafted in any other manner acceptable to them. Although the primary purpose is
to give the claim proceeds to the assignee, other conditions may be introduced
to give effect to this objective.. For example, the condition that “if the
assignee predeceases the assignor, then the assignment is revoked” will be a
natural requirement for these purposes.<o:p></o:p></span></span></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="line-height: 150%; margin: 0cm -16.55pt 0pt -18pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt; line-height: 150%;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><span style="font-family: Times New Roman;"><span style="color: black;">As an alternative to
executing a conditional assignment, the policy owner may also give the
beneficial interest of the policy moneys to “non- trust nominees” by means of
specific directions in his/her will by virtue of<span style="mso-spacerun: yes;"> </span><b style="mso-bidi-font-weight: normal;">Para6(2)
of Schedule 10</b> of the FSA 2013.<o:p></o:p></span></span></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm -16.55pt 0pt -18pt; mso-line-height-alt: 12.0pt; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<h2 style="margin: 0cm -16.55pt 0pt 0cm; text-align: center;">
<span lang="EN-US" style="font-size: 14pt; font-weight: normal; mso-bidi-font-weight: bold;"><span style="font-family: Times New Roman;"><span style="color: black;">The above discussion is to
impress upon insurers dealing in life insurance and personal accident policies
the need for allowing policy owners to assign policy moneys to specific persons
if they desire to receive the death claim moneys beneficially. Such assignments
may carry the label “Conditional Assignment” or<span style="mso-spacerun: yes;">
</span>any other suitable name. Academics and lawyers<span style="mso-spacerun: yes;"> </span>may find this concept unacceptable because it
is alien to the principles of assignments as seen and applied with other assets
and as taught in law school. It must be noted that the FSA 2013 and its
predecessor for the insurance industry, the Insurance Act 1996<span style="mso-spacerun: yes;"> </span>had created several peculiar legal
“phenomena” applicable<span style="mso-spacerun: yes;"> </span>to insurance
contracts. Among the most significant of this, apart from the concept of
“conditional assignments” is the principle of “suspended trusts”. This of
course, is a matter to be discussed in another paper. <o:p></o:p></span></span></span></h2>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<div class="MsoNormal" style="margin: 0cm 0cm 0pt; text-align: center;">
<span lang="EN-US"><o:p><span style="color: black; font-family: Times New Roman; font-size: small;"> </span></o:p></span></div>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<h2 style="margin: 0cm -16.55pt 0pt 0cm; text-align: center;">
<i style="mso-bidi-font-style: normal;"><span lang="EN-US" style="font-size: 12pt; font-weight: normal; mso-bidi-font-weight: bold;"><span style="font-family: Times New Roman;"><span style="color: black;">21<sup>st</sup> April 2015<o:p></o:p></span></span></span></i></h2>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
<h2 style="margin: 0cm -16.55pt 0pt 0cm; text-align: center;">
<span lang="EN-US" style="font-size: 14pt;"><o:p><span style="color: black; font-family: Times New Roman;"> </span></o:p></span></h2>
<div style="text-align: center;">
<span style="color: black; font-family: Times New Roman; font-size: small;">
</span></div>
</span><div style="text-align: center;">
<strong></strong> </div>
Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-32596622080638214432013-08-08T09:08:00.003+08:002013-08-08T09:09:35.114+08:00<div class="separator" style="clear: both; text-align: justify;">
<b><span style="font-family: Georgia, Times New Roman, serif; font-size: large;">Latest Workshop </span></b></div>
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<b><span style="font-family: Georgia, Times New Roman, serif; font-size: large;"><br /></span></b></div>
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<b><span style="font-family: Georgia, Times New Roman, serif; font-size: large;"><i>The Financial Services Act 2013 & Insurance</i></span></b></div>
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<b><span style="font-family: Georgia, Times New Roman, serif; font-size: large;"><br /></span></b></div>
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<span style="font-family: Georgia, Times New Roman, serif;"><span style="font-size: 12pt; line-height: 150%; text-align: justify;">The
Financial Services Act 2013 which came into effect on 30th June 2013 </span><span style="font-size: 12pt; line-height: 150%; text-align: justify;">is one of the most significant legislations ever to affect the Malaysian
financial sector. This Act replaces and thus repeals </span><span style="font-size: 12pt; line-height: 150%; text-align: justify;"> </span><span style="font-size: 12pt; line-height: 150%; text-align: justify;">several Acts, including the Banking and
Financial Institutions Act 1989 (BAFIA), the Exchange Control Act 1953, the
Insurance Act 1996 and Payment Systems Act 2003.</span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif; font-size: 12pt; line-height: 150%; text-align: justify;"><br /></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">In conjunction with the implementation of the Act, I will be conducting a workshop that will focus on the relevant provisions and changes which significantly affect the Insurance industry in Malaysia. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Do contact us to sign up! Seats are limited, so book your place today!</span></div>
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<br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-33979018490408556252013-08-08T08:51:00.001+08:002013-08-08T08:51:51.673+08:00<span style="font-family: Georgia, Times New Roman, serif; font-size: large;"><b>The Financial Services Act 2013 & Insurance </b></span><br />
<span style="font-family: Georgia, Times New Roman, serif; font-size: large;"><b>A Handbook</b></span><br />
<span style="font-family: Georgia, 'Times New Roman', serif;"><br /></span>
<div style="text-align: justify;">
<span style="font-family: Georgia, 'Times New Roman', serif;">I am pleased and thrilled to announce the launch of my new book! This book is an essential guide to the Financial Services Act 2013 and its impact on the operational aspects of life and general insurance. </span></div>
<div style="text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><span style="font-family: Georgia, Times New Roman, serif;"><span style="font-size: small;"><span style="line-height: 150%;">The
Financial Services Act 2013 came into effect on 30th June 2013 and
is one of the most significant </span></span><span style="line-height: 24px;">legislations</span><span style="font-size: small;"><span style="line-height: 150%;"> ever to affect the Malaysian
financial sector. This Act replaces and thus repeals several Acts, including the Banking and
Financial Institutions Act 1989 (BAFIA), the Exchange Control Act 1953, the
Insurance Act 1996 and Payment Systems Act 2003. This handbook is intended to
serve as a guide to those involved in the application and operational aspects
of life and general insurance. <o:p></o:p></span></span></span></span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span lang="EN-US" style="font-size: 12pt; line-height: 150%;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></div>
<br />
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span lang="EN-US" style="font-size: 12pt; line-height: 150%;"><span style="font-family: Georgia, Times New Roman, serif;">The
focus of this book is on Schedule 8, Schedule 9 and Schedule 10 of the
Financial Services Act 2013 and would thus serve as a useful tool to those in
the underwriting, policy servicing, claims, training and group insurance
departments of insurance companies in Malaysia. </span><span style="font-family: Book Antiqua, serif;"><o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span lang="EN-US" style="font-size: 12pt; line-height: 150%;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span lang="EN-US"><span style="font-family: Georgia, Times New Roman, serif;"><span style="font-size: small;"><span style="line-height: 150%;">The Handbook will be available for purchase at leading bookstores from mid-August 2013 </span></span><span style="line-height: 24px;">onward</span><span style="font-size: small;"><span style="line-height: 150%;">. </span></span></span></span></div>
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</div>
Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com0tag:blogger.com,1999:blog-9138656636828375102.post-4083741660989217262012-10-10T09:27:00.002+08:002012-10-10T09:27:18.445+08:00Payment of Death Claim Proceeds to Minors in a Trust Policy<div class="MsoNormal" style="margin: 0in 0in 0pt;">
The <b style="mso-bidi-font-weight: normal;">Insurance Act 1996</b> provides 2 different sections that allow insurers to make payment of death claims where the nominees of the policy are minors. These are found in <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Section 166(3)</i></b> and <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">S170</i></b>.<o:p></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
There is an apparent “overlap” that may occur in some circumstances.<o:p></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Section 166(3)</i></b> is more specific for trust policies and directs the insurer to consider the surviving parent as a trustee. The insurer may thus pay the incompetent (minor) nominees moneys to the surviving parent and shall receive a proper discharge for all liability.<br style="mso-special-character: line-break;" /><br style="mso-special-character: line-break;" /><o:p></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Section 170</i></b> is probably intended as a wider and general provision as the words in the section also include incompetent nominees who are of unsound mind. <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Section 170a(ii)</i></b> further provides that where the policy moneys are more than RM10 000.00, the insurer should pay to the Public Trustee.<o:p></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
Following the above, it is thus quite obvious that there seems to be an overlap of the provisions in the Act when nominees of trust policies are minors.<o:p></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
It is therefore contended that an insurer has a discretion to apply either of the above two provisions when paying out a claim. It is further contended that where there is a surviving parent, the law must have intended that <b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Section 166(3)</i></b> to apply and payment ought to be paid to the surviving parent. It must also be borne in mind that payment to the Public Trustee will incur expenses in that fees will be charged. These may be completely avoided if payment is made a surviving parent.<o:p></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
For easy reference, the two relevant sections are quoted below.<o:p></o:p></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Section 166(3)<o:p></o:p></i></b></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<i style="mso-bidi-font-style: normal;">The policy owner, by the policy, or by a notice in writing to the licensed insurer, may appoint trustees of the policy moneys and where there is no trustee<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-indent: -0.25in;">
<i style="mso-bidi-font-style: normal;"><span style="mso-list: Ignore;">a)<span style="font: 7pt 'Times New Roman';"> </span></span></i><i style="mso-bidi-font-style: normal;">the nominee who is competent to contract; or<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-indent: -0.25in;">
<i style="mso-bidi-font-style: normal;"><span style="mso-list: Ignore;">b)<span style="font: 7pt 'Times New Roman';"> </span></span></i><i style="mso-bidi-font-style: normal;">where the nominee is incompetent to contract, the parent of the incompetent nominee and where there is no surviving parent, the Public Trustee.<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<b style="mso-bidi-font-weight: normal;"><i style="mso-bidi-font-style: normal;">Section 170</i></b><i style="mso-bidi-font-style: normal;">Where a person has not attained the age of eighteen years, or who is certified by a medical practitioner in the public service to be of unsound mind and no committee of his estate had been appointed, or to be incapable, by reason of infirmity of mind or body, of managing himself and his property and affairs, the licensed insurer<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.5in; mso-list: l2 level1 lfo2; tab-stops: list .5in; text-indent: -0.25in;">
<i style="mso-bidi-font-style: normal;"><span style="mso-list: Ignore;">a)<span style="font: 7pt 'Times New Roman';"> </span></span></i><i style="mso-bidi-font-style: normal;">in case of a nominee under subsection 166(1)<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.75in; mso-list: l1 level1 lfo3; tab-stops: list .75in; text-indent: -0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="mso-list: Ignore;">i)<span style="font: 7pt 'Times New Roman';"> </span></span></i><i style="mso-bidi-font-style: normal;">if the policy moneys are ten thousand ringgit or less or such other amount as may be prescribed, may pay to a person who satisfies the licensed insurer that he will apply the policy moneys for the maintenance and benefit the nominee under subsection 166(1), as the case may be, or a person to whom policy moneys are payable under subsection 169(2) or (6), subject to the execution of an undertaking by that person that policy moneys will be applies solely for the maintenance and benefit of the nominee;<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.25in;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.5in; text-indent: 0.25in;">
<i style="mso-bidi-font-style: normal;">and<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt 0.75in; mso-list: l1 level1 lfo3; tab-stops: list .75in; text-indent: -0.5in;">
<i style="mso-bidi-font-style: normal;"><span style="mso-list: Ignore;">ii)<span style="font: 7pt 'Times New Roman';"> </span></span></i><i style="mso-bidi-font-style: normal;">if the policy moneys are more than the amount in paragraph (a)(i), pay to the Public Trustee or a trust company nominated by the Public Trustee;<o:p></o:p></i></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<i style="mso-bidi-font-style: normal;"><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: 'Times New Roman'; mso-fareast-language: EN-US;">in the case of a person to whom policy moneys are payable under subsections 169(2) or (6), pay to the Public Trustee or a trust company nominated by the Public Trustee.</span></i>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com3tag:blogger.com,1999:blog-9138656636828375102.post-8208703498407641132012-09-14T11:38:00.001+08:002012-10-10T09:56:34.652+08:002-Day Workshop - Legal Aspects of Life Insurance<div>
</div>
<div class="Default">
<b><span style="font-size: 20pt;">17th and 18</span></b><b><span style="font-size: 13pt;">th </span></b><b><span style="font-size: 20pt;">October 2012 </span></b><span style="font-size: 20pt;"><o:p></o:p></span></div>
<div class="Default">
<b><span style="font-size: 20pt;">Royal Lake Club, Kuala Lumpur <o:p></o:p></span></b></div>
<div class="Default">
</div>
<div class="Default">
<b><span style="font-size: 14pt;">An Exclusive Workshop for: </span></b></div>
<div class="Default">
<ul>
<li><span style="font-size: 11.5pt;">Heads of departments, managers and executives of Claims, Policy Servicing, Underwriting, Group </span><span style="font-size: 11.5pt;">Insurance, Training and Operations Department of Life Insurance companies and Takaful Operators.</span></li>
<li><span style="font-size: 11.5pt;">Managers and executives of banks and trust companies involved in Banccasurance.</span></li>
<li><span style="font-size: 11.5pt;">Trainers, lecturers, and moderators of insurance and financial planning courses</span></li>
<li><span style="font-size: 11.5pt;">Advocate & Solicitors and legal officers of insurance companies and takaful operators </span></li>
</ul>
</div>
<b><span style="font-size: 15pt;">Workshop Topics: </span></b><span style="font-size: 15pt;"><o:p></o:p></span><br />
<div class="MsoNormal">
<b><span style="font-size: 11.5pt; line-height: 115%;">Legal Aspects of Life Insurance<o:p></o:p></span></b></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal">
<b><u><span style="font-size: 14pt; line-height: 115%;">Day 1 – 17th October 2012</span></u></b><br />
<br />
<b>I. Formation of Contract<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l10 level1 lfo2; text-indent: -0.25in;">
Offer and Acceptance<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l10 level1 lfo2; text-indent: -0.25in;">
Consideration and “Interim Coverage”<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l10 level1 lfo2; text-indent: -0.25in;">
Principle of Utmost Good Faith<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l10 level1 lfo2; text-indent: -0.25in;">
Basis Clause<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l10 level1 lfo2; text-indent: -0.25in;">
S.147(4) Insurance Act - Incontestable/Indisputable Clause<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l10 level1 lfo2; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l10 level1 lfo2; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>II. Takaful Principles<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l8 level1 lfo3; text-indent: -0.25in;">
Comparison with conventional insurance<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l8 level1 lfo3; text-indent: -0.25in;">
al-Gharar, al-Maisir & al-Riba<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l8 level1 lfo3; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l8 level1 lfo3; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>III. Insurable Interest<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l2 level1 lfo4; text-indent: -0.25in;">
S.152 Insurance Act<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l2 level1 lfo4; text-indent: -0.25in;">
Understanding Insurable Interest<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l2 level1 lfo4; text-indent: -0.25in;">
Industry Practices</div>
</li>
</ul>
<div class="MsoNormal">
<b>IV. Duty of Disclosure<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l7 level1 lfo5; text-indent: -0.25in;">
Basis of the Duty<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l7 level1 lfo5; text-indent: -0.25in;">
Traditional View – Lambert’s Case<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l7 level1 lfo5; text-indent: -0.25in;">
The change in the law – S.150(1) Insurance Act<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l7 level1 lfo5; text-indent: -0.25in;">
Exceptions to the duty of disclosure – S.150(2) & (3) Insurance Act<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l7 level1 lfo5; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l7 level1 lfo5; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>V. Insurance Agents<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l5 level1 lfo6; text-indent: -0.25in;">
Principal – Agent Relationship<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l5 level1 lfo6; text-indent: -0.25in;">
Agent and the proposal form<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l5 level1 lfo6; text-indent: -0.25in;">
Position taken by the law<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l5 level1 lfo6; text-indent: -0.25in;">
Knowledge of the agent S.151 Insurance Act<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l5 level1 lfo6; text-indent: -0.25in;">
Liability of insurer on terminated agents</div>
</li>
</ul>
<div class="MsoNormal">
<b>VI. Group Insurance<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraph" style="mso-list: l3 level1 lfo7; text-indent: -0.25in;">
Disclosure requirements and the insurer’s liability to individual members</div>
</li>
</ul>
<div class="MsoListParagraph" style="mso-list: l3 level1 lfo7; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b><u><span style="font-size: 14pt; line-height: 115%;">Day 2 – 18th October 2012</span></u></b><br />
</div>
<div class="MsoNormal">
<b>VII. Nominations<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l3 level1 lfo7; text-indent: -0.25in;">
Nominees as Executors<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l3 level1 lfo7; text-indent: -0.25in;">
Payment to Nominees<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l3 level1 lfo7; text-indent: -0.25in;">
Retrospective implications<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l3 level1 lfo7; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l3 level1 lfo7; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>VIII. Trust Policies<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l4 level1 lfo8; text-indent: -0.25in;">
Nominees of Statutory Trusts –S.166 Insurance Act<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l4 level1 lfo8; text-indent: -0.25in;">
Appointment of Trustees<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l4 level1 lfo8; text-indent: -0.25in;">
Implication of “Credit-Proof” moneys<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l4 level1 lfo8; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l4 level1 lfo8; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>IX. Policies of Muslims<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l1 level1 lfo9; text-indent: -0.25in;">
S.167(2) Insurance Act<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l1 level1 lfo9; text-indent: -0.25in;">
Distribution of policy moneys<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo9; text-indent: -0.25in;">
Policies effected before 1st January 1997<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo9; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l1 level1 lfo9; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>X. Assignments<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l6 level1 lfo10; text-indent: -0.25in;">
Absolute/Conditional assignments<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l6 level1 lfo10; text-indent: -0.25in;">
Assignments and their uses<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l6 level1 lfo10; text-indent: -0.25in;">
S.168 Insurance Act<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l6 level1 lfo10; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l6 level1 lfo10; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>XI. Payment of Death Claims<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l11 level1 lfo11; text-indent: -0.25in;">
Statutory requirement of insurers<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l11 level1 lfo11; text-indent: -0.25in;">
When there are no named nominees<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l11 level1 lfo11; text-indent: -0.25in;">
Position taken by the law<o:p></o:p></div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l11 level1 lfo11; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l11 level1 lfo11; text-indent: -0.25in;">
</div>
<div class="MsoNormal">
<b>XII. Bankruptcy<o:p></o:p></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Principles affecting life insurance policy administration and claims<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Fraud & S.166(5) Insurance Act<o:p></o:p></div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Use of Absolute assignments and Applicant-Owner policies<o:p></o:p></div>
</li>
</ul>
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</div>
<div class="MsoNormal">
<b><span style="font-size: 14pt; line-height: 115%;"> Highlights of the Workshop<o:p></o:p></span></b></div>
<ul>
<li><div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo1; text-indent: -0.25in;">
Nominations, trusts and assignments – their uses, legal implications and related sales and marketing ideas.</div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -0.25in;">
Payment of claims and practical guidelines to avoid legal disputes</div>
</li>
<li><div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo1; text-indent: -0.25in;">
Recommendations for preparing new business and policy servicing forms</div>
</li>
<li><div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo1; text-indent: -0.25in;">
Guidelines for training administrative and agency personnel </div>
</li>
</ul>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
<span style="font-size: large;"><b> Workshop Leader</b></span></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
<b><i> K KARUNAMOORTHY</i></b></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
<b><i> B.Sc (U.Mal), LL.B (Hons) (Lond), CLP</i></b></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
<b><i> AMII, ACII (Lond), CFP,Shariah RFP</i></b></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Karunamoorthy, an advocate and solicitor by qualification,has been a consultant and trainer in the financial services industry since 1979. His wide range of educational qualifications and vast experience has made him a leading authority on the subject of life insurance law and estate planning. He has provided his expertise to insurance companies, banks, unit trust companies, trust corporations and various professional associations in Malaysia. He is also a regular trainer and consultant in law and financial planning and has authored several books and publications on these subjects.<br />
<br />
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
<span style="font-size: large;"><b> Workshop Details</b></span></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Date : 17 and 18 October 2012 (Wednesday & Thursday)</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Time : 9.30am - 5.30pm</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Venue : Royal Lake Club , Perdana Room 2 , 2nd Floor</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Jalan Cenderamulia, off Jalan Parlimen</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
50480 Kuala Lumpur.<br />
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Fee : RM 795 per participant</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
RM 745 each for three or four participants from the same organisation</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
RM 695 each for five or more participants from the same organisation<br />
<br />
(<em>Fee inclusive of a comprehensive reference manual, lunch and tea-breaks)</em><br />
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Closing date for registration – 11 October 2012</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Enquiries:</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Contact – Ms. Devi at 012-2547552 or Mr Prashant 017- 2669997</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
Ans.Service/Fax: 03-26923045</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
<b><i> Participants are advised to bring along a copy of the Insurance Act 1996</i></b></div>
<div>
</div>
<div>
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l9 level1 lfo12; text-indent: -0.25in;">
</div>
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</div>
Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com1tag:blogger.com,1999:blog-9138656636828375102.post-27645302563459867722012-05-04T16:06:00.000+08:002012-05-04T16:06:19.575+08:00Medical Insurance Made AffordableA major player in the indusry has a unique offer for those seeking to purchase medical insurance. Pacific Insurance Bhd has a scheme known as the Pacific Medi Major which provides for expenses incurred based on reasonable and customary charges for medical treatment. This is similar to many of the medical insurance schemes available in Malaysia but this scheme has one crucial difference. The premiums are much lower because the insured has to bear the first portion of the medical expenses incurred.<br />
<br />
In a sense, this is similar to the "excess clause" in a motor insurance policy. Those familiar with having made claims in a comprehensive motor insurance policy for any 'own damage' claim of the motor vehicle will know that the insurer will only reimburse the expenses which are above the "excess" amount.<br />
<br />
The Pacific Medi Major operates in a similar manner. Let us have a look at a simple example with actual figures in order to understand how this scheme works.<br />
<br />
If a person aged 48 intends to purchase a plan based on Hospital Room and Board of RM300 per day:<br />
<br />
He can claim for expenses up to an annual limit of RM75,000.00<br />
He can claim for expenses up to a lifetime limit of RM300,000.00<br />
For every disability he claims from the insurer, he will bear the first RM5000.00 of the expenses<br />
His annual premium will be RM431.00<br />
<b><i><br /></i></b><br />
<b><i>Other features of this scheme are as follows:</i></b><br />
<br />
<ol>
<li>An individual wishing to enter this scheme must be between the ages of 19 and 60</li>
<li>The insured has the option to renew the coverage up to the age of 80 (subject to the usual limitations)</li>
<li>Premiums are the same whether for male or female insured persons</li>
<li>Premiums are age banded i.e. the same rates will apply within a particular age band. The insurer may, however, increase the premiums based on overall claim experience with the approval of Bank Negara Malaysia</li>
<li>The insurer only pays out the claim after the insured has claimed from other insurers, if any</li>
<li>Pre-existing illnesses and other usual exclusions apply</li>
<li>Other features are very similar to those seen in most medical insurance schemes in the market</li>
</ol>
<div>
<b><i>The Medi Major Plan is most suitable for:</i></b></div>
<div>
<ul>
<li>Those who are not willing to pay the higher premiums as seen in the market and are able to bear the first portion of the loss</li>
<li>Those who are already having other medical insurance (for example, as provided by employees) but feel that such coverage is inadequate</li>
</ul>
<div>
Interested readers who require more details can post their questions in the comments section below or alternatively, visit <a href="http://www.pacificinsurance.com.my/">www.pacificinsurance.com.my</a> for further information. </div>
</div>
<br />
<br />Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com8tag:blogger.com,1999:blog-9138656636828375102.post-16012374787741478772012-04-19T11:32:00.001+08:002012-04-19T11:33:43.750+08:00Impact of Bankruptcy on An Insurance Policy<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18.0pt;"><span lang="EN-US">In understanding the consequences of bankruptcy affecting life insurance policies, we must first know and get familiar with the legal processes and terminology involved. When an individual is insolvent and therefore unable to pay his debts, legal proceedings may be instituted against him. If the debt is not settled, the final step in this process is for the creditors to petition for a bankruptcy order against him. This order is issued by the courts and is the most effective way to enforce a judgment order against a debtor for the purposes of recovery of moneys owing to the creditor. The effect of a bankruptcy (receiving and adjudication) order is to freeze the assets of the debtor and subsequently to distribute them amongst his creditors. The various stages, rules and procedure of these steps are governed by the Bankruptcy Act 1967 of which the amendments passed in 2003 are significant. </span></div><div class="MsoNormal" style="line-height: 200%; text-align: justify; text-indent: 18.0pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18.0pt;"><span lang="EN-US">Notable amongst these amendments is that debts owing to creditors must be a minimum sum of RM 30 000.00 for a bankruptcy petition to be initiated. Another important change is that duties of the Official Assignee are now placed in the hands of the Director General of Insolvency (DGI). The person holding this office (or his representative) is effectively responsible for the management of the affairs of the debtor and has wide discretionary powers as provided in the Bankruptcy Act.</span></div><div class="MsoNormal" style="line-height: 200%; text-align: justify; text-indent: 18.0pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18.0pt;"><span lang="EN-US">Once a person has been declared a bankrupt, it is his responsibility to declare to the DGI all his assets and income as well as to cooperate with him in carrying out his duties. These duties include the gathering of the assets of the debtor, managing and eventually distributing them amongst the creditors. The bankrupt can no longer enter into any contracts or financial dealings without the consent of the DGI. Any moneys or assets received by the bankrupt must be declared to the DGI who will allow him to use those for the necessary expenses of maintenance of himself and his family. In this aspect, the DGI has a discretion including whether to allow for the payment of life insurance premiums by the policy owner if he is declared a bankrupt. It must be noted that he is under no obligation to make any such allowances. </span></div><div class="MsoNormal" style="text-align: justify; text-indent: 18.0pt;"><span lang="EN-US"> </span></div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0cm; margin-left: -9.0pt; margin-right: 33.85pt; margin-top: 0cm; tab-stops: 9.0pt;"><span lang="EN-US"> </span><b style="line-height: 150%; text-align: justify; text-indent: 18pt;"><i><span lang="EN-US" style="font-family: 'Arial Rounded MT Bold';">Trust Policies Under Section 166 of the Insurance Act 1996.</span><span lang="EN-US"> </span></i></b></div><div class="MsoNormal" style="line-height: 150%; margin-left: -9.0pt; text-align: justify; text-indent: 18.0pt;"><span style="line-height: 150%; text-indent: 18pt;">Section 166 of this Act provides for the creation of trusts of insurance policies for the benefit of spouse, children and (in some cases) parents, if they are named as nominees of a non-muslim policy owner. It further states that proceeds of death claims of such policies “shall not form part of the estate of the deceased policy owner or be subject to his debts”. This trust, which is a unique “statutory gift”, is a benefit not available to any other assets of a policy owner. This is because other subsections in Section 166 allow the policyowner to deal with the trust policy (under certain conditions) during his lifetime but nevertheless provides this ‘creditor protection’ benefit to his family members. Thus, it can be stated that although the trust is created during the lifetime of the policyowner, the benefit only crystallises upon his death. It is therefore clear that creditors, through the office of the DGI in bankruptcy proceedings, cannot lay a claim on these moneys. They can however, lay a claim of the cash values of the policyowner because this is deemed to be part of his assets during his life-time. The DGI in these circumstances may write to the insurance company to provide for details of the policy especially the cash (or surrender) value and has a discretion to further direct it to terminate the policy contract and forward all available moneys to him.</span></div><div class="MsoNormal" style="margin-left: -9.0pt; text-align: justify; text-indent: 18.0pt;"><br />
</div><div class="MsoNormal" style="margin-left: -9.0pt; text-align: justify; text-indent: 18.0pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; margin-left: -9.0pt; text-align: justify; text-indent: 18.0pt;"><span lang="EN-US">Although death claim proceeds are “credit protected” as stated above, this benefit can be revoked if creditors successfully obtain such an order from the court on the grounds that premiums under the policy were paid to defraud them (Section 166(5) Insurance Act 1996).</span><br />
<b style="font-family: 'Arial Rounded MT Bold'; line-height: 150%; text-indent: 18pt;"><i><br />
</i></b><br />
<b style="font-family: 'Arial Rounded MT Bold'; line-height: 150%; text-indent: 18pt;"><i>Absolute Assignment of a Life Insurance Policy. </i></b></div><div class="MsoNormal" style="line-height: 150%; margin-left: -9pt; text-align: justify; text-indent: 18pt;"><span style="line-height: 150%; text-indent: 18pt;">The effect of Section 52 of the Bankruptcy Act is that an Absolute Assignment of a life insurance policy, unless made to a purchaser (or for valuable consideration) in good faith, is deemed void against the DGI if such an assignment was effected within 2 years of the bankruptcy. This means the DGI can direct such policies to be surrendered and realize the cash value, as he would in dealing with the other assets of a bankrupt. If death occurs to the bankrupt / assignor, the death claim proceeds of the policy may therefore be used to distribute amongst the creditors. The provisions of this section further state that in certain circumstances the assignment may also be deemed void, if it was created within 5 years of the bankruptcy.</span></div><div class="MsoNormal" style="margin-left: -9pt; text-align: justify; text-indent: 18pt;"><br />
</div><div class="MsoNormal" style="margin-left: -9pt; text-align: justify; text-indent: 18pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; margin-left: -9pt; text-align: justify; text-indent: 18pt;"><span lang="EN-US">This article attempts to convey a simple overview of the law in relation to bankruptcy and its effect on life insurance policies. It is written with the intention to minimise legal language as far as possible which always runs the risk of incompleteness. Furthermore, these is very little case law (or recorded cases) in this subject which may help one to understand the practical issues better. However, it must be noted that the Director General of Insolvency (previously the Official Assignee) has wide discretionary powers in dealing with the assets of the bankrupt. </span><span lang="EN-US" style="font-family: Garamond; text-transform: uppercase;"><o:p></o:p></span></div>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com1tag:blogger.com,1999:blog-9138656636828375102.post-24347376706530192522012-04-12T09:24:00.000+08:002012-04-12T09:24:26.162+08:00When A Shareholder or Director Passes Away<!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves/> <w:TrackFormatting/> <w:PunctuationKerning/> <w:ValidateAgainstSchemas/> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF/> <w:LidThemeOther>EN-MY</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables/> <w:SnapToGridInCell/> <w:WrapTextWithPunct/> <w:UseAsianBreakRules/> <w:DontGrowAutofit/> <w:SplitPgBreakAndParaMark/> <w:DontVertAlignCellWithSp/> <w:DontBreakConstrainedForcedTables/> <w:DontVertAlignInTxbx/> <w:Word11KerningPairs/> <w:CachedColBalance/> </w:Compatibility> <w:BrowserLevel>MicrosoftInternetExplorer4</w:BrowserLevel> <m:mathPr> <m:mathFont m:val="Cambria Math"/> <m:brkBin m:val="before"/> <m:brkBinSub m:val="--"/> <m:smallFrac m:val="off"/> <m:dispDef/> <m:lMargin m:val="0"/> <m:rMargin m:val="0"/> <m:defJc m:val="centerGroup"/> <m:wrapIndent m:val="1440"/> <m:intLim m:val="subSup"/> <m:naryLim m:val="undOvr"/> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
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<div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><b><span lang="EN-US" style="font-family: "Bookman Old Style","serif"; font-size: 14pt;"></span></b><i><span lang="EN-US">This article highlights the issues that arise when a shareholder, who is also an active director of a private limited company (Sdn. Bhd.), passes away, and how life insurance can help to avoid or minimize the problems of such a consequence. To best understand this subject, an example is illustrated of an established and successful company with 3 shareholders who are also executive directors involved in the management and operations of the company. If one of these shareholders who owns, (for example) 30% of the shares of the company passes away, how would this affect his family, the other shareholders and the company?<span> </span></span></i></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><span lang="EN-US">First and foremost, the following must be noted. The shares of an individual, like all his other personal assets, are part of his estate. Upon his death, these are dealt with by the estate administration laws. The legal representatives of the estate i.e. the executor or administrator, will be the only ones allowed to deal with the shares. Furthermore, they are authorized to deal with it only after the Probate or Letters of Administration are obtained from the High Court. This is applicable whether the Shareholder is Muslim or Non-Muslim. </span></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><span lang="EN-US">Secondly, it must also be noted that upon death of a shareholder the Articles of Association of the company (which is a requirement of the Companies Act 1965) further stipulate that any transfer of shares may only be done with the consent of the directors. The legal representative is authorized to instruct the directors to transfer the shares according to the Will, or the Distribution laws of the country (this will differ in the case of Muslims and Non-Muslims). The beneficiaries who are entitled to the shares may also voluntarily transfer the shares to others (again with the consent of the directors).<span> </span></span></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><span lang="EN-US">Thirdly, beneficiaries are entitled to only the rights and benefits (if any) that are due to them as a consequence of their ownership of the shares (e.g. dividends). They are, of course not entitled to the salary, allowances, perks or any other benefits which were given to the deceased Shareholder in his capacity as director. It must be pointed out that in such companies (as given in this example) the directors hardly ever declare dividends. Profits of the company are usually further invested in the company or are given to the directors as bonuses or in various forms of additional benefits. The net effect of this scenario is that, the beneficiaries are entitled to the shares whose monetary value would be a very subjective matter and if they are in urgent need of funds, they would need to sell the shares at a “willing-buyer-willing-seller” basis to the other shareholders / directors or any other persons interested in the purchase. It is thus obvious, that the beneficiaries would not be in a ‘strong-bargaining-position’. Family members holding on to the shares of a minority shareholder (30%), would not be too much of an inconvenience or bother to the surviving shareholders / director’s.<span> </span></span></div><div class="MsoNormal" style="text-align: justify; text-indent: 18pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><span lang="EN-US">In order to avoid these difficulties and pitfalls to the beneficiaries of a deceased shareholder / director, the following is recommended. Shareholders should enter into a ‘Buy-Sell Agreement’ of the shares which is to take effect upon the death of any one of them. The key issues to be addressed in such an agreement must include.</span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN-US">i)<span> </span>The obligation of the surviving shareholders to purchase the shares of a deceased <span> </span>shareholder.</span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN-US">ii)<span> </span>The current value of each shareholders interest and provisions to revalue them in <span> </span>the future.</span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN-US">iii)<span> </span>The distribution of the deceased’s shares amongst the surviving shareholders.</span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN-US">iv)<span> </span>The mechanisms of the transfer and execution of the relevant documents.</span></div><div class="MsoNormal" style="text-align: justify;"><br />
</div><div class="MsoNormal" style="text-align: justify;"><span lang="EN-US">v)<span> </span>The duty of the legal representatives of the estate of the deceased shareholder who <span> </span>is bound by the terms of the agreement. </span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><span lang="EN-US">Of course, several other terms and conditions, depending on the peculiarities of each company will be further necessary to give effect to such an agreement. Foremost amongst these would be the appropriate funding method for the purchase of the deceased’s shares. Life insurance would be the obvious choice of moneys that would available upon the death of a shareholder. Suitably arranged insurance policies would be able to provide all or a substantial part of the moneys necessary to give effect to such a ‘Buy-Sell arrangement’.</span></div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><br />
</div><div class="MsoNormal" style="line-height: 150%; text-align: justify; text-indent: 18pt;"><span lang="EN-US">As there are several details and legal matters to be considered shareholders, need to source for suitably qualified and experienced insurance agents or financial planners to ‘put together’ such a “buyout” scheme of shares upon the death of a shareholder.</span></div><div class="MsoNormal" style="margin-left: -18pt;"><br />
</div><div class="MsoNormal" style="margin-left: -18pt;"><br />
</div>Karunahttp://www.blogger.com/profile/10675316911483471832noreply@blogger.com2