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

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

3. Introduction
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4. 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
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5. 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
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6. Claims
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7. 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.
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8. 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.
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9. How To Tackle The Exposures
Advice is statement of Promise
Failure to Exercise The Duty of Care
Error & Omission
Misstatement
Misrepresentation
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10. How To Tackle The Exposures
Error & Omission
How to protect yourself against Professional Negligence
Professional Indemnity Insurance
Insurance
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11. Policy Coverage
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12. 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
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13. 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.
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14. 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
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15. Sample of Legal Cost
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16. 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
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17. 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 (excl GST) RM3,000,000 any one claim and in the aggregate for any one Unit Manager/District Manager RM (excl GST) and RM30 million in total Liability
AIA PI
24 Feb 2016

18. Questions & answers
24 Feb 2016

19. 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
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20. 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
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21. 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

22. 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

23. Thank you
Manpreet Kaur Gill
Liability Manager