PROFESSIONAL INDEMNITY for Life Agents, Unit Managers, District Managers of American International Assurance Berhad and AIA Public Takaful Berhad Manpreet Kaur Gill Date : 09.06.2016

Agenda Introduction Claims Policy Coverage Question & Answers AIA PI 24 Feb 2016

Introduction This is the document title

General Principle of Agent Insurance Agent An intermediary who is authorized by the Insurer to act on behalf of the Insurer to arrange supplies of insurance policies 2. What do they do? Insurance agent contact potential customer and sell one or more type of insurance. It is an insurance agent responsibility to explain various insurance policies and choose the right policy they suit their needs Footnote This is the document title

What are the Exposure of Insurance Agent Failure to procure the necessary insurance protection based on their client request. The court may view this as a breach of professional duty because. The failure to effectively communicate and explain the coverage being offered Exposure for agent is in the storing and proper handling of sensitive client data Footnote This is the document title

Claims This is the document title

Claim Scenarios of Agent Professional Negligence An agent arranges a Medical Plan on behalf of a customer. It was alleged that the planner did not explain the implications of the moratorium period on her new plan. The customer would have had some cover on her old policy if she had not switched, albeit at a lower limit. A person retained an insurance agent to effect comprehensive insurance to cover her business operations, and the agent neglected to file the appropriate paperwork to make the policy active, then the agent has been negligent. If an accident happens and the business is not covered because of the agent’s failure to file the appropriate paperwork, then the client may argue the insurance agent is liable for malpractice under a theory of negligence. Footnote This is the document title

Claim Scenarios of Agent Professional Negligence A client asks her agent to find her a home insurance policy that will provide coverage against damage to or loss of all the contents of her home. The agent selects a plan for the client but, after a break- in, the insurance company denies coverage for antique jewelry based on an exclusion in the policy. The client may file a claim against the insurance agent for malpractice because he failed to select a policy that would meet her stated needs. Footnote This is the document title

How To Tackle The Exposures Advice is statement of Promise Failure to Exercise The Duty of Care Error & Omission Misstatement Misrepresentation Footnote This is the document title

How To Tackle The Exposures Error & Omission How to protect yourself against Professional Negligence Professional Indemnity Insurance Insurance Footnote This is the document title

Policy Coverage This is the document title

Policy Coverage Legal liability for compensation What is Professional Indemnity Insurance Covers professionals for negligent acts, errors or omissions in services performed for third parties / clients. What Are the Coverage? Legal liability for compensation Legal Investigation and Defense Costs incurred Footnote This is the document title

Awards / Judgements / Settlement AIA cases The smallest reserve was RM 5,000 and the biggest reserve was RM 100,000 General Claims In a region of RM 25,000 to at least RM 3,000,000. Footnote This is the document title

SAMPLE of LEGAL COSTS The fees payable by you will generally depend on the amount of work done on your behalf, the time taken and the difficulty of the work involved. Prior to 2011, filing civil case at the magistrate’s court cost only RM 2,000. However in March 2011, Bar Council President Ragunath Kesavan expect lawyer fees to increase by 300% to 400% so you will cost the cost rise from RM 2,000 to RM 8,000 or RM 10,000. This does not include cases filed in High Court, which has a bigger responsibility. Source from The Star, March 01, 2011 and Article By Bhag Singh of The Malaysia Bar Council Footnote This is the document title

Sample of Legal Cost Footnote This is the document title

Who is the Insured? Policy Coverage Life agent, District manager, Unit manager, Any consultant, independent contractor, temporary contract labour, self employed person, who are solely under contract with and/or under the supervision of the life agent and/or life agents of the district manager/unit manager, Valid and current members of AIA Berhad and/or AIA Public Takaful Berhad Footnote This is the document title

Pricing Limit of Indemnity Premium per person per year RM1,500,000 any one claim and in the aggregate for any one Life Agent RM 120.00 (excl GST) RM3,000,000 any one claim and in the aggregate for any one Unit Manager/District Manager RM 220.00 (excl GST) and RM30 million in total Liability AIA PI 24 Feb 2016

Questions & answers 24 Feb 2016

Insuring Clause A Insuring Clause B Policy Coverage Any claim* by third party for breach of professional duty in the conduct of professional business practice carried on by or on behalf of the Insured by reason of any negligent act, error or omission committed or alleged to have been committed on the part of the Insured *In relation to the sales, distribution, and promotion of AIA’s Life and General Insurance products. Insuring Clause A pay the costs and expenses in the defense or settlement of any claim covered under Insuring Clause A Insuring Clause B Footnote This is the document title

Policy Basis Policy Coverage Must be a negligent act, error or omission Must be in the provision of a professional service which relates to AIA Life Insurance Products Must act within the professional boundaries as set out by AIA Territorial/ Jurisdictional Cover: Malaysia Claims must: Come from an unrelated third party First occur and be notified to QBE during the policy period Footnote This is the document title

Scope of Cover Compensation for Court Attendance – this is a benefit of RM250 per person per day up to RM100,000 for agents and RM500 per person per day up to RM250,000 for District Managers/Unit Managers Continuous Cover (condition apply) Extended Reporting Period – up to 90 days beyond the POI to report claims made during the POI (condition apply) AIA PI 24 Feb 2016

Scope of Cover Investigation and Representation Expenses – pay for costs with respect to official investigations – up to RM100,000 any one claim and RM1,000,000 for agents and RM150,000 any one claim and RM1,500,000 for District Managers/Unit Managers Data Protection Breach (PDPA) – amount payable RM100,000 any one claim and RM1,000,000 for agents and RM150,000 any one claim and RM1,500,000 for District Managers/Unit Managers Territory/Jurisdiction : Worldwide excluding USA/Canada Retroactive date – unlimited retroactive cover Deductible : RM2,500 each and every claimant inclusive of costs and expenses AIA PI 24 Feb 2016

Thank you Manpreet Kaur Gill Liability Manager