Malaysia: NAMLIFA appeals for greater relief measures in COVID-19 crisis

| 02 Apr 2020

The National Association of Malaysian Life Insurance and Family Takaful Advisors (NAMLIFA), has appealed for more measures to be introduced to lend a helping hand to policyholders and members in this Coronavirus (COVID-19) crisis.

The Association said it was heartening to note that on 27 March 2020, Bank Negara Malaysia had announced that affected life insurance policyholders and family takaful participants will have the option to defer their regular payments for three months, extend the period which they can reinstate a policy/certificate, amongst other options available for them to continue to meet their premium payments and maintain their policies/certificates.

However, NAMLIFA is concerned that the gloomy sentiments and the prolonged pandemic will affect the purchasing power and buying decisions of the public, the ability of policyholders to continue servicing their premium payments, as well as the income of agents in this trying period.

NAMLIFA initiated a survey to listen to its members and an overwhelming 17,123 respondents provided their feedback conducted over the weekend.

It has since submitted its proposal to the central bank to appeal for the following relief measures to lend a helping hand to policyholders and its members in this exceptional circumstance:

A. Relief Measures for Policyholders

  • No Lapse Guarantee for Investment-Linked Policies (ILP) for a period of 6 months (April to September) as long as premiums are paid (excluding policies whereby premium deferment is granted). 

    This follows the hefty drop in fund value after COVID-19 was escalated to “pandemic”. Many policies may have suffered a deficit in unit value.
  • To lower the Management Fee and Policy Fee of ILP to enhance the sustainability of policies/certificates in view of lacklustre equity markets.
  • For traditional policies, allow extension of 90 days grace period for those directly affected by the COVID-19 on a voluntary basis.
  • To waive the Automatic Premium Loan (APL) interest during this period of time to protect their cash values which may be intended for children education and retirement objectives.
  • To reduce interest rates charged on APL and Policy Loan to 4%, to be in tandem with the current climate for interest which has been on the downward trend even before the crisis.
  • Allow a special one-off auto revival option given to policyholders of any policies which have lapsed, within 90 days after MCO has ended; for uninterrupted cover for themselves and their loved ones. This will also reduce lapses and any replacement of policies.
  • To lessen the burden of policyholders during the economic crisis, insurers should waive all coinsurance/co-takaful for admissions to hospitals for a period of 6 months (April to September).
  • To defer all re-pricing of medical plans for at least 12 months to alleviate further burden to affected policyholders.


B. Relief Measures for Agency Force

  • In view of the extended MCO coupled with weak market sentiments, relaxation of all Maintenance of Contract requirements for all agents and agency leaders for year 2020.
  • Persistency Ratio requirements are to be revised in view that many policyholders will be impacted by the economic crisis arising from Covid-19 for year 2020 and 2021.
  • Reduce CPD hours of all agency members from 30 CPD hours (inclusive of BSC 5 CPD hours) to 15 CPD hours (inclusive of BSC 5 CPD hours).
  • Financial grant for agency force whose income are impacted during the crisis to enable them to stay afloat and stay focus in business while providing professional services to policyholders. The grant would curb the attrition rate of the agency force, which has been alarming over the last two decades.

Mr Lim Kim Poi, NAMLIFA President, said that the life insurance industry is an important financial sector which thrives on trust and support of the intermediaries as well as the public during good times. In this difficult and trying time, some rules should be set aside and relief measures introduced to lend a helping hand to those in need.

“NAMLIFA would like Bank Negara Malaysia and the Malaysian Government, in particular, to view the plight of both the policyholders and the agency forces’ seriously. To reiterate our Prime Minister’s message to assist all Malaysians, 'not to leave anyone behind', we have the confidence that with a 'PRIHATIN RAKYAT' Government the aforesaid relief measures recommended above will be met positively to ensure long term sustainability of the life insurance and family takaful industry,” he concluded.

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