AGENCY MATTERS

Association Membership
The number of registered general insurance agents as at 31^st December 2006 and 2007 are as below:-

As at 31^st December, 2007, the number of registered general insurance agents totaled 39,165, a decrease of 4% compared to 40,869 in 2006. This is largely due to termination of agents who had not met the Minimum Maintenance Contract of RM20,000 gross premiums per agency during either the first or second year of the two-year validity of the period of registration as an agent. More than half (i.e. 20,082 or 51%) of the registered agents transact business with only one Principal.

The distribution of agents in the respective states in Malaysia and Singapore was as follows:-

Professionalism of Distribution Channels
Measures undertaken in 2007 to enhance professionalism amongst intermediaries included the following :-

- Agency Undertaking by Banks and Motor Vehicle Franchise Holders
In order to enhance governance and promote equity in the transaction and procurement of general insurance services and products via insurance intermediaries, effective 30th November 2007, an Undertaking is required to be submitted by parties who are exempted from registration in the ICAGIB/ GIARR i.e banks and motor vehicle franchise holders.

This Undertaking would expressly subject the banks and motor vehicle franchise holders to all the rules and guidelines of the ICAGIB/GIARR that are currently applicable to all Registered Agents.

- Development of a Best Practices Framework Between Insurers, Brokers and Takaful Operators
To instil greater market discipline and improve customer service standards in the general insurance industry, a Best Practices Framework was jointly developed by MITBA, PIAM and MTA for insurers, takaful operators and brokers. The Framework was implemented from 1st July and is an industry effort to facilitate the reconciliation of accounts and the payment of premiums between insurers, takaful operators and insurance and takaful brokers.

The Framework sets out the standard operational procedures for business arrangements between insurers and takaful operators and brokers including the introduction of a Cash-Before-Cover (CBC) arrangement for individual personal accident and travel insurances. The Framework also provides for compliance requirements for classes which are subject to the Premium Warranty.

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