Page 48 - LIAM Annual Report 2020

46 ANNUAL REPORT 2020

REGULATORY

INVESTMENT-LINKED BUSINESS
Following the issuance of the Policy Document on Investment-linked Business by Bank Negara Malaysia (BNM) on
11 January 2019, LIAM issued the Minimum Standards for Sales Practices for Investment-Linked (IL) Policies as best
practices for the industry in May 2020.
Licensed insurers should incorporate into its policies and procedures, the standards of professional conduct that
they expect of their appointed advisors and representatives. Insurers are also expected to clearly communicate
to their agency force to inform consumers on the sustainability requirements which are to safeguard the interests
of IL policy owners where premiums for new IL policies will be set at a level where policies are expected to be
sustainable until the end of the contractual term at the point of sale.

A guide to IL policy owners on their insurance coverage was also communicated by insurers to their policy owners
in the second half of 2020, highlighting how IL policies work, what affects IL fund values and actions that can be
taken if the fund becomes insufficient to ensure continued insurance coverage for the full policy term.
Effective 1 January 2020, IL policy owners will be given annual updates on the expected sustainability of their IL
Policies with the intention to encourage policy owners to manage their policies more proactively, including taking
appropriate actions where necessary. The best practices cover pre-sales, point-of-sales and post-sale standards
for insurers and their representatives, as well as training and competency requirements.
LIAM also engaged the Malaysian Insurance Institute (MII) to develop a 5-hour training programme on IL Life
Insurance as part of the enhanced training requirements for agents marketing IL products. The training programme
was developed as a minimum standard to enhance the current training that agents are already undergoing, and
insurers may customize the materials to suit their needs.

Life Insurance Association of Malaysia