Page 33 - LIAM Annual Report 2021

AnnuAl RepoRt 2021 31

rePort of tHe ManageMent coMMittee

Insurers should establish procedures for periodical evaluation of the CFF
by an independent team where appropriate/remedial actions should
be taken in the event that the CFF forms do not meet the minimum
expectations.

The best practice guide on evaluating the CFF forms and appropriateness
of product recommendations is targeted to be implemented in 2023.

In addition, the industry drafted a list of best practices for raising the
professional standards of insurance advisors to increase the confidence
of financial consumers, which include the best practices on pre-contract
evaluation and training, basic training upon being contracted, on-going
training, joint fieldwork and role-playing, activity management as well as on-going servicing of customers. Also covered are the
best practices for agency managers as well as the insurers who would be responsible for the actions of their respective advisors.
These best practices are expected to be finalised in 2022.

eXPansion of Hrdf act 2001

The Pembangunan Sumber Manusia Berhad (Human Resources Development) Act 2001 has been expanded to cover a score
of industries including the insurance sector effective 1 March 2021 as part of the Government’s initiative to provide training
and up-skilling of Malaysians to keep up with fast-changing business landscape and changing demands of the labour market.

With this expansion, insurance companies are required to contribute 1% of the monthly wages to the Human Resources
Development Fund (HRDF), managed by HRD Corporation.

However, taking into account the economic impact of the COVID-19 pandemic, companies were exempted from paying levy
between June and December 2021; they only started paying in January 2022.

LIAM organised a virtual engagement session with HRD Corporation on 29 October 2021 for Heads of Human Resource from
member companies to seek clarification on issues relating to the levy contribution and the criteria on claiming of training
programmes.

eXeMPtion froM staff training eXPenditure (ste) requireMents

Under the Staff Training Expenditure guideline issued by BNM on 23 December 2015, insurers and takaful operators (ITOs)
are subject to a minimum training expenditure of 3.5% of staff gross salary.
Due to the COVID-19 pandemic, ITOs have had to move to e-learning and conduct training virtually, instead of organising
a face-to-face training. Following the appeal from companies, BNM exempted ITOs from the STE requirements in 2020 and
2021 and the exemption continues for 2022.