SUB-COMMITTEE REPORTS

AGENCY MATTERS

Agency Registration System
The number of agency units registered under the General Insurance Agents Registration Regulations (GIARR) as at 31^st December 2008 and 2009 were as below:-

As at 31^st December 2009, the number of registered general insurance agents was 35,930 representing a decrease of 7.8% compared to 38,766 in 2008. The decrease in 2009 was due largely to the termination of agents who have failed to register their business with the Registrar of Businesses under the Regulation of Businesses Act 1956. 53% (i.e. 18,954) of the registered agents transact business with only one Principal.

The geographical distribution of agents is as below:-

Requirement to Register Agency Business under the Registration of Businesses Act 1956
To ensure that the provisions under the Registration of Businesses Act 1956 are complied with, the Agency Board advised all existing agents, in particular, individual agents transacting business under their personal name to register their agency with the Registrar of Businesses.

The requirement for any person intending to be general insurance agents to submit a copy of their business registration document when an application is made for registration as an agent (new application) was enforced with effect from 5^th February 2009.

Agents' Continuous Professional Development (CPD) Module
The Association continued to enhance the Online Agency Registration System (OARS) with the inclusion of a new CPD Module which allows insurers to submit online the CPD training hours earned by their agents. The online CPD module has facilitated Principals in checking and tracking the CPD hours earned by an agent with him and his other Principal (for an agent representing 2 Principals).

The penalties imposed on agents who do not meet the required 20 CPD training hours per annum are a Letter of Warning (for first time offence), suspension (for second time offence) and termination (for third time offence).

Guidelines on Mandatory Rebating for Direct Business
The Guidelines on Mandatory Rebating for Direct Business was implemented with effect from 1st July 2009. Under these Guidelines, individual consumers who handle their own insurance procurement arrangements by purchasing insurance covers directly from insurance companies are eligible to receive a premium rebate.

Under the Guidelines, individual consumers who purchase their motor insurance policy directly from a licensed insurance company will be eligible to receive a 5% premium rebate in the first year of implementation of these Guidelines and 10% thereafter. For non-motor insurance products, the rebate entitlement is subject to the full commission allowed for that class of business under the Guidelines to Control Operating Costs of General Insurance Business.

For other business entities such as soleproprietorships, partnerships and corporations, the rebates would be at the discretion of insurers.

Guidelines on Campaigns and Sponsorships
With effect from 1^st May 2009, members agreed to prohibit the holding of any form of campaigns, sponsorships or contests for consumers for all classes of business and the offering of gifts, promotional items or any other forms of rewards to consumers as inducements for the purchase of insurance products of member companies.

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