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Insurance agents move may hike premiums
The Sun
25 Jan 2013
National
6
English
Kong See Hoh
Daily
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Black/white
270,506
171,000
120 cm²
RM 1,323
RM 3,970
Insurance agents' move may hike premiums
BY KONG SEE HOH
[email protected]
THE government is reviewing the Operating
Cost Control (OCC) guidelines introduced in
1996, including looking into revising life and
general insurance agents' commission rates, a
move that may cause the premiums for new
policies to go up.
Deputy Finance Minister Datuk Donald
I.im Siang Chai told Sin Chew Daily the
government had proposed that insurance
companies absorb the additional costs
incurred for providing higher commission to
insurance agents, saying insurers enjoy high
profit margins and definitely have the ability
to afford higher commission payouts without
having to pass them on to new policyholders.
The National Association of Malaysian Life
Insurance Fieldforce and Advisers (Namlifa)
has asked for the commission for agents to be
increased to 221% from 177% currently, whereas
the General Insurance Agents Association of
Malaysia (Perwakim) is seeking a 5% increase
to 15%.
Lim disclosed that Bank Negara Malaysia
deputy governor and representatives from the
finance ministry and the two associations had
met to review the cost guidelines regulating
life insurance agents, and to discuss agents'
requests to increase their commission rates.
He said the central bank will submit a
report on the matter to Prime Minister Datuk
Seri Najib Abdul Razak next week.
Asked if insurance companies would
increase insurance premiums as a result of
increased costs arising from higher
commission rates, Lim said there are 14
insurance companies in Malaysia, and
suggested that consumers shop around to get
the best deal
Namlifa president Sethu Karuppan told Sin
Chew he was confident that insurance
companies would absorb the extra costs and
not increase the premiums on new policies.
He said it was time the commission rates,
which have not been revised for more than 10
years, be increased.
Perwakim president Athi Rao also believed
insurance companies would not burden new
policyholders as the association asked only for
a small increase of 5% in commission.
As living and operating costs have been
going up, he said the increase sought by the
association is very important to its 35,000
members as there had been no increase in
commission over the past 20 years.