(Strictly for members of GELFAAM and GSM Association only)
Judge on Facts, not on Allegations, Act Rationally, Not Emotionally
Facts from GELM to counter the Associations’ Declaration (thru epartner)
Response from Two Associations
A1
Agents have different needs – some aim for personal sales while others aim for agency
building. Consequently, different contracts have been set to cater to the respective needs.
The idea of the agency building contract was first mooted by a group of agency leaders in
2004 as they found that the Company's contract was geared towards personal sales and not
recruitment/agency building. It was precisely with this in mind that the Company then
introduced another contract that is designed for agency leaders who wish to chart their career
path in this business and elect for agency building, which is important in managing turnover in
the agency. This contract is optional.
The maximum commissions payable under both contracts are the same - 171% for traditional
business and 160% for investment-linked business. This cap on
the commission has been set by Bank Negara Malaysia (BNM).
The only difference between the contracts is the spread/apportionment of the commission.
Oppose two contracts
 Builder contract is optional
The implementation of Builder contract was not
transparent, only certain invited GSMs were offered. It
has another set of qualifying criteria. Can you say this is
fair?
 Builder contract’s commission apportionment also
follows the guidelines. If you think that Builder contract
is more attractive to mobilise the field force to increase
business, why not combine the current “D” contract and
to make one agency contract?
 We strongly oppose the implementation of two agency
contracts with different benefits. Being agents of the
same company, selling the same products, why do we
have differing commission and bonuses?
After the implementation of Builder contract, the field force has
been divided into two groups. Is this what you want?
A2
The introduction of PR requirement has reduced the Company's lapse rate from 13.5% (for
Great Protect series) to 7.5% with the Smart Protect series With the improvement of PR it has
improved our agents income
The purpose of introducing Persistency and Production Bonus was to drive greater
responsible selling and encourage the retention of the policy so that the policyholders would
continue to benefit from the insurance cover and the agents would earn the maximum
allowed as this is only possible if the policy remains in force.
The restructure in the commission structure for investment-linked plans was implemented
with the Smart Protect plans that were launched in 2009. The maximum paid is still 160%
over 6 years which is the maximum allowed by the regulators.
Other companies had introduced Persistency Bonus long before us.
Remove ILP Commission
 If the purpose of introducing Persistency and Production
Bonus is good, the company could discuss with both
Associations before implementation.
nd
 Why remove the ILP 2 year commission (5%) without
consent from the field force?
When removal of a contractual benefit can be a precedent, the
agency contract is not secured.
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
A3
The agency contract expressly allows the Company to issue circulars and directives from
time to time in the form of Agency Rules and Regulations, which relate to operations and
conduct of the agency issued under the agency contract. This clause has been in both the C
and D versions of the agency contract for more than 20 years.
The circulars issued form part and parcel of the agency relationship as provided by the
agency contract.
In relation to the annual persistency ratio, production requirements and other maintenance
requirements, Clause 19 of the D version of the agency contract (in use since 1996) makes
specific reference to the prevailing Agency Rules and Regulations.
A4
The Management has not terminated any agent under Clause 18 since it agreed that it would
inform the Associations 14 days from the date of notice of termination in order for the
Associations to be assured of the need for such a termination.
The GSM referred to, was not terminated underClause 18 as alleged by GELFAAM but under
Clause 20 of the agency contract. The Company had terminated the GSM with valid reasons.
The reference to Clause 18 in GELM’s termination letters for gross misconduct is intended to
refer to the proviso relating to GELM’s right to hold back Deferred Benefits and other
commissions.
This also serves to protect the interests of the Immediate Officer (‘IO’) .i.e if agent
misappropriate premium, GELM will hold back the commissions payable to the terminated
agent, and the IO will not be immediately affected.
(Strictly for members of GELFAAM and GSM Association only)
Circular Superseding Contract
 Although the agency contract allows the company to
issue circulars and directives from time to time in the
form of Agency Rules and Regulations, the key is how to
practise it?
 Why we didn’t face so many problems in the “C” contract
era?
 All maintenance, promotion, PR and manpower
requirements are part of the contractual terms. We
agree with reasonable adjustment, but this should be
subject to negotiation.
Clause 18
 We realised that the termination without reason Clause
18 had been in the agency contract for a long time.
Instead of totally removing the clause, Dato Koh had
promised that “the Company will continue to retain this
clause, but in the event that they need to exercise this
clause, they will inform both the Associations with 14
days’ notice” Why is this not being practised?
 If terminating a GSM recently only needed clause 20,
why quote clause 18? The intention of including clause
18 is very clear in the paragraph 3 of the termination
letter. This sounded like a killer who kills people with a
gun but tries to justify that the people are only killed by
the bullet and not the gun. If clause 20 and clause 18
are the bullet and gun, who is the killer?
In the termination of the GSM, the proposal form and claims
were approved by the company, the policy had been inforce for
over 5 years. What’s wrong with the GSM to suffer such drastic
action?
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
A5
Circular issued by En Ahmad Akil (Senior Manager) to the Agency Force dated 26th
December 1995 states that “The Company will continue to pay all remunerations as per
current contract based on the old block of business secured up to 31 December 1995 as long
as you remain an agent of the Company”
The 5% production commission (PC) on HB and CAB riders was a contractual benefit
provided in the C version of the agency contract (applicable prior to 1996).
The Company paid all remunerations in accordance to the “C” Contract
Then why did the Companyonly pay this 5% on PC on HB&CAB in 1996 and stopped
payment of 5% PC on HB & CAB effective from 1997 onwards?
The Company stopped payment because:
Effective from 1997 onwards, the contractual provisions in the C Contract were not valid
anymore.
1. This is because this benefit is only payable upon meeting qualifying criteria in
accordance to the C Contract.
Clause 2 of the C Contract- Schedule of Remuneration attached to the
Supplementary Agreements states that:
“ In any month in which the SA /IA/ AS/ DSO / GSM qualifies for the payment of
Production Commission (PC), the SA / IA/ AS/ DSO / GSM shall also be paid a
Production Commission equal to 5% of the Premiums received by the
Company on all Hospitalisation and Accident Benefits riders
2. To qualify for Production Commission, the SA/ IA/ AS/ DSO/GSM were required
produces a First Year Life Premium Income (FYLPI) of the amount as stated in
their contract.
3. There were no more FYLPI from policies issued prior to 1996 effective 1997
onwards.
As such the payments were contractually not payable from 1997 onwards
The Company has honored this circular and has paid all benefits as per the C
Contract and where not contractually bound, has even paid on goodwill basis.
The Company has always regarded the agency force as its business partners.
Despite the PC on HB and CAB being not contractually payable, the Company has
accommodated the appeals and requests of the Agents' Associations towards
resolving the matter in the following manner:
a) Goodwill payment of PC on HB and CAB, which commenced in 2004 onwards
for qualified agents and payable on such premiums received; and
(Strictly for members of GELFAAM and GSM Association only)
The 5% PB on CAB/HB under the “C” contract for 15 years
 It was stated in the “C” contract
 Based on the circular by the then Senior Manager in
1995 which guaranteed all benefits under the “C”
contract will be honoured.
 When the 5% PB was not paid, upon our leaders’
request to GE, in year 2006 and 2010 the payments
made were considered as “goodwill”. The contractual
formula was used to calculate these two payments. For
goodwill payment, a different method should be used.
This means that GE had already consented it was a
contractual benefit.
 Based on contract and Ahmad Akil’s letter, all benefits
were paid including agents’ commission on Whole Life
Endowment riders and CAB/HB. Why only this 5%
Production Commission on CAB/HB is not paid?
 Group CEO stated in his statement to clarify that the
company’s computer system can capture all the past
nd
data. And the total 2 payment was RM10,099,337.43
whereas CEO Dato Koh mentioned that our computer
system cannot capture the relevant data. Also, the total
payout was RM10.8 million.
Why these two
discrepancies? Who is telling the truth?
 We have appointed a lawyer to fight this case in court.
We are in the life insurance business. Sincerity is the most
important factor. When sincerity is lost, everything is lost.
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
(Strictly for members of GELFAAM and GSM Association only)
b) Ex-gratia goodwill payment of PC on HB and CAB for the period of 1997 to
2003.
Background
·2002:
5 years following the implementation of OCC, the Associations first appealed for this
payment. The Management responded that this was not contractually payable.
·2004:
After several meetings, the GELM Management had in 2004 finally agreed as a gesture of
goodwill, to only pay PC on HB & CAB on the premiums collected from the HB and CAB
riders to qualified members of the Field Force, for 2004 onwards. The Agents Associations
accepted this decision as well as the payments made by GELM and did not raise the matter
at any time during the quarterly meetings with the GELM Management on 16 September
2004 and 8 April 2005.
·2007:
The Associations again appealed for the PC on HB and CAB on premiums received on
policies secured prior to 1 January 1996 (when the Operations Cost Control Guidelines was
enforced) from 1997 to 2003. The Management reverted that PC from 2004 was paid as
goodwill and Management maintained the position that that it was not contractually
payable.from 1097 to 2003
·2010:
In March 2010, the Associations once again appealed.
In April 2010, the Associations accepted that the Company was unable to extract the actual
premium and proposed that the Company pay an equivalent of 7 times of the PC that was
paid in 2004 (to cover the period from 1997 to 2003). This was minuted on 24 April 2010 and
confirmed in 16 August 2010.
The Company appealed to the Board to pay an ex-gratia sum to maintain the good working
relationship between the agency force represented by the Associations and the Company.
The Board approved this as a gesture of goodwill
·2011
22 February 2011
The Company informed the Associations that the Board had approved an ex-gratia and in the
same month paid the ex-gratia for PC on HB & CAB based on method of calculation
proposed by the Associations. This was minuted on 22 Feb 2011 that with the payment the
matter was considered as closed. This minutes was confirmed on 10 May 2011
24 February 2011: Once again the Associations raised the issue going against the previous
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
(Strictly for members of GELFAAM and GSM Association only)
agreement and claimed that this is a contractual benefit and requesting the payment to be
calculated on actual production and that the Company pay Interest at prevailing OCBC Bank
interest rate on the re-computed PC. This disregarded the previous understanding,
agreement and confirmation minuted on 22 February 2011 that the payment of 5% PC on HB
& CAB from 1997 to 2003 was made on a goodwill basis as a goodwill payment
In September 2011, the Company received a letter of demand from GELFAAM’s solicitors.
The Company’s solicitors replied to this.
In November 2011, BNM forwarded a letter from GELFAAM dated 20 October 2011. The
Company replied BNM on 30 November 2011.
·2012:
On 5 January 2012, the Associations submitted a Memorandum of Demand (MOD) where
this issue was one of the items listed.
On 9 March 2012, the Company presented its reply to the MOD to all the Associations' Exco
and Branch Representatives.
On 13 April 2012, the Company officially replied to the MOD.
On 22 May 2012, the Company walked through the MOD reply once again with the
Associations’ Exco.
On 15 June 2012, BNM officially requested for an explanation on the letter to the Prime
Minister on this issue. The Company replied BNM.
The Association allegation on “During the past negotiations, the then CEO agreed to pay
partially due to the computer system's inability to provide the data. However, in the
recent letter from the Group CEO, he asserted that there was no problem for the
computer to provide the data. What is the true story then?”
The above allegation and misleading statement made is very serious. The GCEO replied with
regard to this particular matter had been quoted out of context and absolutely untrue.
Full version of the GCEO replied on this matter as follows:
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
(Strictly for members of GELFAAM and GSM Association only)
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
(Strictly for members of GELFAAM and GSM Association only)
B1
B2
Replacement of policy (ROP) is regulated by BNM and the handling has been implemented in
accordance with BNM guidelines.
The guideline requires life insurers to issue a letter to the policyholder advising on the
disadvantages of replacing an existing policy with a new policy. Life insurers are only
authorised to pay commissions for Category B ROP upon receipt of the signed confirmation
from policyholders. For Category A ROP, life insurers are instructed to stop all commissions
even if the policyholder confirms that he/she understands the consequence of the ROP.
Policy issuance cannot be curtailed if policyholders wish to proceed with the policy. However,
NB would also inform agents through the Standard Letter of Query (SLQ) when ROP is
detected.
Life insurers are allowed to exempt cases from being penalised under ROP where it is
established that the policyholder’s wish to replace the policy is genuine and can be proven to
be beneficial to the policyholder.
Great Eastern is one of the few life insurers with a structured ROP appeal process.
Allegation that ROP is hash is not true.
More than 86% of ROP appeals cases for 2011 were approved.
ROP



Since July 2012, a line was opened for each branch as a service for the agency force to
contact the branches directly under the following conditions:
a) Calls for urgent/complicated branch-related matters that require the attention of the
Branch Administration Heads; and
b) All matters that cannot be answered through the centralised Customer Service
Careline.
In addition, a cheque tracking system was set up in August 2012 to facilitate servicing agents’
monitoring of the cheque status and location for collection.
Through the Customer Service Careline, an appointment system for branches allows
appointments to be set at least one working day prior to the appointment date. Branches will
be notified immediately after the call and will return call to the agents for appointment
confirmation within the same day.
Phone System
 While we welcome the implementation of centralised
phone system, which has been a feature with other
businesses, the idea of preventing agents from calling
the GE branches is unreasonable as we are in the
service industry.
 If the company has to save cost, why burden the agents
who have to personally visit the GE office to get their
work done incurring both extra costs and time? Is this
fair?
We are totally disappointed during many discussions in the past
two years. This problem cannot be solved by giving good
reasons.
ROP is not a fair guideline for life insurance field force.
The CEO approves waiver of ROP.
In the allegation of ROP, the key points are:
a. The guideline requires life insurers to issue a letter
to the policyholder advising on the disadvantages of
replacing an existing policy with a new policy. The
agent has no right to control the policyholder when
the latter wants to surrender the policy.
The
company has to respect the policyholder’s right and
not to penalise the agent.
b. With the same guidelines, other companies’ CEO
can negotiate with their Associations to get a better
solution on ROP cases because their CEOs care for
the agents’ plight.
Why our CEO cannot
accommodate?
We query whether placing the clawback commission into the
company’s operating expenses account is right?
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
B3
IL products are much sought after in the market and the industry is responding to this.
Customers, especially those in the younger age group, benefit from the higher protection
accorded by the product.
Through the Supremacy point system, the Company encourages our agency force to expand
to the protection market targeting especially the young graduates and young families through
an affordable and comprehensive protection product which are Investment Linked plans and
non-participating plans.
Supremacy production points have been introduced to build capacity of producers to capture
the protection market where related products are given higher points as an incentive to
encourage them.
The Supremacy point system works similarly to some insurance companies, giving double
count or special count for selling ILP as a form of incentive to qualify for supremacy overseas
trip.
The point system also caters to building the capability of producer through attendance of
training and leadership development programmes as well as recruitment with bonus points.
However, agents who sell traditional products are no worse off as their production is also
counted under the point system.
Through the Supremacy point system, the desired habit to achieve higher productivity and
operation efficiency such as 100% e-Submission, has been delivered and enabled Great
Eastern to achieve close to 60% Magnum underwriting with faster turnaround time.
The Management does look at the feedback from agents and has made the Supremacy
points concept more meaningful with the implementation of:
a) Monitoring tool in e-Partner called the Supremacy Summit Aspirants' Points calculator.
b) Regular updates in e-Partner on the production and bonus points.
c) From the initial activities that were introduced with lower bonus points, the point system
has evolved by implementing key activities with higher bonus points approach. This
allows Supremacy Aspirants to focus on key activities and help them to plan easier for
building their capability and leadership as well as gaining higher bonus points.
d) In 2012, the Company introduced a new approach with “Value Points Combo” to assist
agents in focusing on key activities to obtain the maximum amount of bonus points.
Notwithstanding the above, agents should act in a professional manner and sell products
based on the needs of the customer and with “treat the customer fairly” in mind.
The Company would also like to stress that Compliance Department investigates all
complaints received in a professional manner.
(Strictly for members of GELFAAM and GSM Association only)
Supremacy Point System
We strongly oppose the implementation of Supremacy point
system due to:
 The intention of the Point System is to push agents to
sell ILP products. It is to “disobey” the rules of selling –
“selling on needs”; this may breach the rule of “Treating
Customers Fairly”.
If we make the same point to selling all policies, and make it free
of charge for attending courses to accumulate CPD hours and
supremacy point, field force will be happier and will give support.
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
B4
GELM continues to receive complaints from agents, agency leaders and customers about
misconduct, misrepresentation, mis-selling etc. of agents.
It is GELM’s responsibility to ensure that good practice and the professional code of ethics in
the business and industry, are upheld all the times.
We have seen some real live examples in the industry of the consequences where a small
group of agents acted unprofessionally. Those actions resulted in the affected Company
being instructed by the regulator to call all its policyholders to ensure that sales were being
professionally solicited.
Compliance is duty bound to investigate all complaints received by GELM
Once a complaint is received, a letter stating the fraud allegation(s) or misconduct will be sent
to the affected agent, requesting for an explanation within a timeline of 7 days. If no response
is received, a second letter giving an additional 7 days for reply, will be sent to the
affected agent
Suspension of agent's account only arises in circumstances where:
a) The allegation is of serious nature (i.e. misappropriation of premium, cheating, etc.) and
the agent in question has failed to respond after a few notifications and this has
exceeded the 14 days given to respond; or
b) There is substantial evidence to prove the serious allegation; or
c) An agent alleged of misconduct has been notified that an interview has been fixed but
failed to attend the same.
Compliance Department always conducts professional and fair investigation before a decision
is made. There is an appeal committee comprising members of Senior Management, to
review the cases and Compliance is not a part of this.
On Association's allegation on unfair treatment:
1. As at 30 June 2012, 9 agents out of 153 allegations investigated were being suspended
and this demonstrates that it is not the case where the agents’ account were suspended
immediately for failing to respond within 7 days. In fact, ample time, notices and
opportunities have been given to the agents to defend, refute and explain the
allegation(s) made by the complainant against him/her. Procedures are observed to
ensure a proper process in handling of complaint and agents are treated with procedural
fairness and rights to be heard.
2. In the last 3 years, complaints classified under “no case” outcome comprised between
46% to 65% and this indicates a high number of complaints received were resolved with
(Strictly for members of GELFAAM and GSM Association only)
Compliance Dept
 The Compliance Dept should handle all cases very
carefully.
The Dept has to deal with customers’
complaints in an objective manner, treating all parties
fairly.
 When a case is under investigation, the Dept should not
suspend the agent’s account, unless proven guilty.
 Why should Compliance Dept treat agents under
investigation like criminals?
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
(Strictly for members of GELFAAM and GSM Association only)
amicable settlement, baseless allegation or without conclusive evidence to prove the
allegation. Thus, allegation that agents are treated as the guilty party or criminals
and “customer is always right” does not represent the true situation as indicated.
C1
a) The launch of such saving plans was in response to market demand. These saving plans
are participating plans and any investment returns would be shared on a 90%:10% basis
between policyholders and the Company. As professionals, agents should be able to offer
different products to customers according to their needs.
b) These saving products are designed with lower coverage to give higher return to
policyholders. Only for a minority of cases, the total early death claim was lower than the
total premiums paid at certain policy years. Nevertheless, accidental death benefit is
provided.
c) & d) These saving plans are participating plans and any investment returns would be
shared on a 90%:10% basis between policyholders and the Company. The allegation that
the Company has benefited more from this product is, therefore, not true.
C2
a) Our premiums are market competitive and this was derived from our analysis performed
before launching the products.
b) The policy fee that the Company charges is a fair charge, in line with our pricing policy
and it has been filed with BNM.
c) The Company has continuously emphasized during training to agents, the importance of
communicating all the relevant information and explaining the risks on such investment
products to the customer as well as assessing the risk appetite of the customer, before
they purchase these plans. The management fees charged are also within the relevant
limits and guidelines stipulated by BNM.
C3
The error was corrected and resolved as soon as it was detected.
Products
 We are a champion company. We must be the leaders
in products. Why do we need to follow other companies’
products?
 This is life insurance products, protection is a minimal
requirement. Whether our 5 year limited payment
endowment yields good returns or not, the policyholders
will be able to tell from the comparison.
 The company’s product is a proof of whether the
company really cares for the benefits of policyholders
and agents who are stakeholders too.
 With our company’s background, we can give a fair
return to the policyholders, we don’t need to use
accident and death benefits paid to show our results.
Promote ILP Product
a. Based on the feedback from field force, our products are
30 to 40% higher in premium.
b. The policy fee is perpetual whereas the policy is only
issued once. Based on an average ILP policy duration
of 40 year, the total fee payable is RM2,880. Based on
a compound interest of 7%, the total benefits is
RM15,379.89 This is only for one policy. If the
company sold 1 million ILP policies, how huge would the
sum be?
GELSIS
The error was not once and the mistakes were common.
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]
D1
The Company is always aware of the agency force’s role as its business partner and has at
no time treated members of its agency force as employees.
The Life Insurance Advisor (LIA) rank was introduced for strong personal sellers who want to
remain as personal sellers and who did not want to become organisers. The personal seller
position was first removed to encourage agency building. Many of the large companies do not
have the Career Agent (CA) rank and reintroduced as LIA with a higher maintenance
requirement.
On the requirement for “only one family member” as Qualifying Agent for promotion, this is at
discussion stage with the Associations on proposed Contract E.
D2
Persistency requirement (PR) for regular premium plans was introduced to improve the
quality of our business. This is essential as healthy PR will allow the Company to price its
products competitively and this ultimately benefits the customers through continuous
protection, and our agency force, through continuous flow of future income for sustainability
of their long-term business.
On 22 May 2012, when the Company agreed to consider premium holiday as inforce, the
Associations were clearly informed that this was only allowed because the lapse rate had
improved with the implementation of PR from 13.5% to 7.5%. The approval was conditional,
where the Company had stated that it reserved the right to review if the lapsation rate
increases to more than 10% and also if the regulators require premium holiday to be
considered as lapsed.
(Strictly for members of GELFAAM and GSM Association only)
Business Partner
The awareness of the company and its actual practice is another
matter. If not, why would our problem issues be pending so
long?
The Builder contract recognises the LIA rank, whereas CA rank
is in the “D” contract. Why should LIA rank supersede the CA
rank? It is because of “circular supersede circular”.
We need to clarify that “only one family member” requirement as
Qualifying Agent for promotion was stated in the Company’s
proposed “contract E”. We totally objected this request in the
past till now.
ILP Premium Holiday
PR should not be imposed on ILP policy because it is an
investment policy. From time to time, the policyholder may
redeem the units. It is the right of the policyholders and also a
feature of the policy.
ILP premium holiday is also similar to the above.
When the company imposes PR on ILP, it totally cannot remove
the basic stipulated commission without the field force’s consent.
By order of,
GELFAAM Secretary General
GSM Association Hon. Secretary
 RIGHT CAUSE FOR RIGHT FUTURE 
GELFAAM : A-3A-6, Level 6, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel : (603) 9200 6300 Fax : (603) 9200 6400
Website : www.gelfaam.com E-mail : [email protected]
GSM Association : B-8-9, Level 10, Menara Uncang Emas, 85 Jalan Loke Yew, 55200 Kuala Lumpur, Malaysia
Tel / Fax: (603) 92269906
Tel : (012) 7123328
Website : www.gegsm.com Email : [email protected]