WWW.CRASH.TO/INSURANCE E-MAIL : [email protected]

For email updates send your email address to [email protected]

90,000 INSURANCE AGENTS’ LIVELIHOOD IN DANGER

WHEN YOU E-MAIL, GIVE THE FOLLOWING DETAILS:

1. NAME OF INSURANCE COMPANY
2. DATE OF JOINING
3. DATE OF TERMINATION
4. TOTAL NUMBER OF YEARS OF SERVICE
5. FYP FOR LAST YEAR
6. REASON FOR TERMINATION
7. COPY OF TERMINATION LETTER

WWW.CRASH.TO/INSURANCE WILL SUPPORT IN THE FOLLOWING:

IT IS GOOD NEWS THAT THERE IS A CASE IN JOHOR BHARU WHERE THE HIGH COURT AWARDED A FEW MILLION RINGGIT FOR TERMINATION OF CONTRACT BY AIA.

There is a Clause in the Life Insurance Agency Contracts of AIA, Great Eastern and WWW.CRASH.TO/INSURANCE believes it also exists in all other companies, that gives the right to the Insurance Company to terminate the contract of the Agent or Agency Manager by just giving 30-days notice.

Under the same Agreement, after they have terminated the Agent or Agency Manager, the Insurance Companies refuse to pay any commissions even for the policies sold by the Agent / the Agency manager before the termination.

In short, when they terminate, the Agent / Agency Manager leaves with nothing in his hands. He does not have EPF after all the years of hard work in selling policies and recruiting, training and motivating other Agents to sell more policies is all gone to waste in a single moment.

There are cases where people even after 10 and 20 years of service have also been terminated without being given any reason and without a cent. These people who are terminated are left in the lurch.

WWW.CRASH.TO/INSURANCE has come across glaring cases in AIA and Great Eastern. WWW.CRASH.TO/INSURANCE considers these actions by these companies INHUMANE.

The Life Insurance Companies, under the umbrella of LIAM, claim that it is their contractual right. Whilst it may be so, that it is their contractual right, and it is for the courts to decide, you and every Malaysian Insurance Agent better beware that you can find yourself in this position after many years of service. You will then be left without EPF (can you imagine, a Malaysian being without EPF at an old age?). And at the same time, if it is business that the Insurance Companies says that the Agent is building, your business will have no value after all these years.

WWW.CRASH.TO/INSURANCE finds it most repulsive that these Insurance Companies have advertisements such as these;

AIA advertises saying, "Trust us for life", Great Eastern says, "We take care of you for life". Ironically, the question in the public’s mind should be ‘If these Insurance Companies cannot care for their own Agents, how will they care for us, the Policyholders?’.

In reality, what WWW.CRASH.TO/INSURANCE discovered is that the small print in the contract allows these Insurance Companies to terminate any Agent or Agency Manager without giving any reason and deprive him of all livelihood. Not a single cent. Their livelihoods are in danger. The Insurance Companies can exercise this option at their whims and fancies.

NAMLIA, the Insurance Agents’ Association, is also unable to do anything to resolve this problem because the elected Representatives are also afraid that the Insurance Companies can terminate their contract and pay them nothing if they take up the matter.

The individual does not have the financial strength to challenge these giants on and on in Court, i.e. from the lower Courts right up to the Federal Court. Knowing this, these giants use public funds to terminate Agents and Agency Managers and say that they are contractually right.

When they recruit Agents, WWW.CRASH.TO/INSURANCE has yet to come across a single Agent who has been told of this clause at the point of recruitment. It is even worse for Agents who do not know English but are educated in Bahasa Malaysia.

You, Insurance Agents and Agency Managers, READ YOUR CONTRACT. When you do you will realise that any time your business is of no value because the Insurance Company can terminate your contract and pay you nothing.

It is pointless for the Insurance Industry to say 80% of the Malaysian population is not insured whilst these Insurance Companies do not care for their own Agent’s old age and career security.

AS Comfort Agency Sdn Bhd and Tan See Hin have jointly file an action against American International Assurance Company Limited (Guaman Sibil No.: 22-77-99).

1. Their claim amongst many other issues is that they were terminated unfairly and were paid no compensation whatsoever.
2. AIA’s defense filed on the 11^th day of June 1999, states amongst others, the following:

1. Clause 14 of the Statement of Defense reads, "Further, the Defendant will say that the Plaintiffs’ contention that every termination of contractual agreements must be on reasonable grounds is wrong in law and is offensive to the notion of the freedom of contract. If the Plaintiffs’ contentions are accepted, then all contractual agreements will be jeopardized, as parties to the same will only be able to terminate if they can demonstrate that they have reasonable grounds for doing so."

 

2. Clause 18 of the Statement of Defense reads, " Paragraph 16 of the Statement of Claim is denied, and the Defendant will say that the Clause 25 of Agency agreement is balanced and fair to both parties, as it entitles either party to terminate the Agency Agreement, and is essential in any Agency contract."

 

3. Clause 19 and 20 of the Statement of Defense reads, "Further and alternatively, the Defendant will contend, without prejudice to its contentions on the equity of Clause 25 of the Agency Agreement to both parties, that there is not requirement in law for clauses in a contract to be balanced and fair to both sides of an agreement.

 

4. Save that it is denied that the Plaintiffs’ are entitled to the payment of any commissions or benefits whether as alleged or at all, the rest of paragraph 17 of the Statement of Claim is not admitted and the Plaintiffs’ are put to strict reproof of the facts and matters pleaded therein."

WWW.CRASH.TO/INSURANCE is not commenting on the case as it is for the Courts to decide. However, looking at the Statement of Defense of AIA, WWW.CRASH.TO/INSURANCE is convinced of the mindset of AIA and similar Insurance Companies.

The mindset being, we being an Insurance Company, can draft any contract that we wish and make the small individual, young Agent to sign it. At the same time can terminate him anytime by giving 30-days notice and also absorb all the commissions that are due to him for ourselves.

1. Dato Lam Peng Chong and Ors (Agency Managers) applied to the Industrial Court for Reinstatement following the termination by AIA in 1981.
2. The Industrial Court, in 1985, held that Dato Lam and the others were ‘Workmen’ under the Industrial Relations Act 1967. AIA appealed to the High Court to squash the Industrial Relations Award.
3. The High Court refused to squash the Award. (Civil Appeal No.: W-04-15 of 1997)
4. AIA then appeals to the Court of Appeal.
5. The Court of Appeal Judges Gopal Sri Ram, Siti Norma and Mokhtar Sidin JCA on 9^th February 1999 dismisses the appeal by AIA and directs that the dispute be dealt with speedily upon its merits.
6. Justice Gopal Sri Ram JCA, when delivering judgement of the Court, had this to say, "We have before us yet another instance illustrative of the grave injustice that ensues when a preliminary objection is entertained by the Industrial Court. Here is a case where the Minister made the reference in 1985. Now, after the passage of almost 14 years, all we have is a finding that the respondents are workmen. The other critical issues, whether the respondents were dismissed and whether their dismissal was for just cause, are yet to be decided. Most surely, this cuts across the very purpose for which Parliament passed the Act."
7. "The learned judge in the High Court was, for the reason given in this judgement, entirely correct in refusing the appellant the relief it claimed. The appeal is dismissed."
8. WWW.CRASH.TO/INSURANCE believes that it is because AIA and others like it have huge public funds they keep on appealing, knowing fully well the individual Agent will be killed of financially.

WWW.CRASH.TO/INSURANCE reliably learnt that Agency Managers were told by a high ranking Officer of the Company that Great Eastern can survive with no new sales for fifteen (15) years. Therefore, the Agency Managers can leave if they wish.

If this is the typical attitude to their Agents, http://crash.to/INSURANCEWWW.CRASH.TO/INSURANCE questions what attitude they will have to a small individual Policyholder who is making a claim.

1. WWW.CRASH.TO/INSURANCE estimates that in the last five (5) years, AIA alone terminated more than 3,000 Agents. If the rest of the Insurance Companies were put together the number would be probably at least 10,000 Agents terminated.
2. Estimating the commissions the Agents were deprived of, assuming each Agent has got about RM 10,000 worth of annual renewal premium, the commissions that these Insurance Companies have absorbed would easily be RM 100,000,000. AIA alone could easily have absorbed RM 30,000,000 (Thirty Million Ringgit) However as WWW.CRASH.TO/INSURANCE has no access to the financial files of these Companies, these can only remain estimates.
3. Seeing the above figures, it becomes clear as to why these Insurance Companies do not want to pay the terminated Agents the commissions on business that they have sold.

1. WWW.CRASH.TO/INSURANCE calls for all those who were terminated with no compensation to e-mail <Click Here>
2. Every Malaysian who wants to become an Insurance Agent / Agency Manager must be made aware of this danger. If you then decide to still join then that is your choice.
3. Every Malaysian who has a concern for another Malaysian should copy this and fax out to everyone

1. Bank Negara must compel the Insurance Companies to put a clear statement that the Agent can be terminated at any time in the first page of the Agency Application form. (Bank Negara has already compelled every proposal form to have a statement referring to ‘full disclosure’ in the Proposal Form therefore this instruction by Bank Negara is not extraordinary).
2. Bank Negara must provide a formula to calculate the value of the Insurance Agent’s business 7and compel the Insurance Companies to pay this value when the Agent is terminated for any reason whatsoever. (It must be noted that when an employee who has EPF is terminated for any reason whatsoever including for criminal offences, he still has his EPF).

Those Insurance Companies who are willing to provide real security to your Agents are invited to make your offer of the following:

1. State specifically the reasons under which an Agent can be terminated
2. Guarantee payment of business value if an Agent should be terminated and establish a formula for such valuation of the business of the Agent
3. Send your offer <Click Here>

E-MAIL : [email protected]

Make your comments or state your case in your defence by sending e-mail <Click>

1. WWW.CRASH.TO/INSURANCE believes that it is immoral for Insurance Companies to recruit young Malaysians without telling them that they can be terminated at any time without giving any reason and without having to pay even the value of the business that the Agent has already produced.
2. WWW.CRASH.TO/INSURANCE believes that it is immoral for Insurance Companies to keep on appealing to higher and higher Courts as a means of killing the Agent off, financially.
3. WWW.CRASH.TO/INSURANCE believes that it is immoral for Malaysians after many years of work to be left with nothing in their hands, not even EPF.
4. WWW.CRASH.TO/INSURANCE believes that it is immoral that Insurance Companies like AIA, can actually file an affidavit to say that the Agency Contract that they sign with the Agent need not be fair.

1. WWW.CRASH.TO/INSURANCE believes that there are a number of Insurance Companies which have been routinely appealing to higher and higher Courts and abusing Court process. However, only Institutions like you can make a search, throughout all the Courts, to see whether a pattern emerges and you have the ability and the connections to help put and end to such abuse.

WWW.CRASH.TO/INSURANCE WILL SUPPORT IN THE FOLLOWING:

IT IS GOOD NEWS THAT THERE IS A CASE IN JOHOR BHARU WHERE THE HIGH COURT AWARDED A FEW MILLION RINGGIT FOR TERMINATION OF CONTRACT BY AIA.

YOU MAY BE ENTITLED TO CONSIDERABLE MONIES IN COMPENSATION DEPENDING ON YOUR PARTICULAR CIRCUMSTANCES.

For email updates send your email address to [email protected]