Reinsurance in the simplest of meaning simply means the “insurances” that insurance companies buy to cover their insurance business portfolio. Main reasons are to ensure large event losses and large single losses are also covered, insurer would have a much higher capacity to underwrite large risks, and enhance the risk spreading mechanism…..
Share Providing a STOCK-THROUGHPUT INSURANCE COVER or avoiding it? Excluding stock-throughput coverage in a Marine Insurance reinsurance treaty agreement is a norm. However, if you check with your peers the exact nature or meaning of what stock-throughput means, nobody seems to be able to explain…. Some said, there is a prolonged storage extension (i.e., 120 days extension) to the storage after and before the marine voyage. Some commented the voyage involves factory-liked processes or...
Share The Sanction Clause as what Malaysian insurers called it has effectively found its place in the industry on 1st April 2011. What exactly is this Sanction Limitation and Exclusion Clause or Sanction Clause in short? This Sanction Clause had on 1st April 2011 found its place in the Malaysian insurance industry especially where marine related policies were concerned. Most foreign insurers seemed to have steadfastly adopted this clause in particularly Japanese dominant insurers, however, most local...
Share Overseas tax applicable on reinsurance premium This writeup is really for those who are engaged in reinsurance functions; treaty and facultative alike. It is normal for us to charge a 1.25% (back in 2007 and before we charged 1.40%) on the amount of premium reinsured to foreign insurers. We were so used to imposing this tax levy whenever we have dealings with foreign reinsurers, unless they have a branch licensed to operate within...
Share The PIDM Guidelines 2011 (for Takaful and Insurance benefits Protection System {TIPS} – submission and returns on calculation of premium)…. …..has just been introduced. Except for the issue date of this guidelines that was on 11 March 2011 nothing much was mentioned about the implementation date. Nonetheless the guide did mention about the insurers and takaful operators being obliged to pay up the prescribed premium when due – at least we know the...
Share Energas Insurance (Labuan) Limited (Energas), the Captive Insurer of Malaysian energy giant, Petronas National or PETRONAS was granted an “A” (excellent) financial strength rating from AM Best. A.M. Best Co. has assigned a financial strength rating of A (Excellent) and an issuer credit rating of “a” to Energas (Malaysia). The outlook for both ratings is stable. The ratings reflect Energas’ adequate capitalization, strong reinsurance protection and its unique role as the primary insurance...
Share What are punitive damage awards? In the context of this posting, punitive damages or what is usually termed as exemplary damages are damages intended to deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit. Although the purpose of punitive damages is not to compensate the plaintiff, the plaintiff will in fact receive all or some portion of the punitive damage award. Punitive damages...
Share Pardon my ignorance! But seriously…. very few practitioners actually knew about a major change having made to the section 140(1) of Malaysian Insurance Act 1996 back in March 2009. Let’s revisit relevant subsections of section 140 of the Insurance Act prior to 31st March 2009: Section 140 Insurance Act 1996 – Insurance of property and liability (1) Except with the prior written approval of the Bank, no person shall insure or cause to...
Share 1st May 2010 morning did provide some heart-troubling scenes for those who were within the Golden Triangle location to witness. Morons made moronic decision – just because those pilots were senior and experienced crew, with each having clocked over 10,000 flying hours, it was alright to have the Boeing 747 – 400 gliding through some rooftops of couple of iconic buildings…. By the way, the plane was actually flying some 2,000 to 3,000 feet...
Share During today’s drinking session, my reinsurer friend lamented to me as to how stupid those practitioners (the insurer perspectives) from the past could have been, for having accepted a share of the Permanent Loss of Licence (LOL), and worst…… they accepted a Quota-Share (QS) version! A Permanent Loss of Licence QS that runs into perpetuity! Of course, he has no reasons to feel bad since he had no hands in this piece of...
Share TRYING A HAND ON MICRO-BLOGGING… In an Aviation meeting yesterday, we drifted into a question of an emergency landing situation where the pilot of an ATR plane did a forced landing onto a nearby island runway. After the successful landing and the plane’s troubled engine having been repaired, it was discovered the runway is not suitable for take off….. It never occurred to me that a plane like the ATR can land but...
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