TO P L I F E I N S U RA N CE
N E W S S T O R I E S OF
2013

Bangladesh

Govt. Approved License for14 New Life Insurance and 2 Non-Life Insurance Companies:
After approving the license of 14 New Life and 2 Non-Life Insurance companies in 2013 now thetotal number of insurance companies are 77 out of which 32 Life Insurance companies (IncludingJiban Bima Corporation – A Govt. Owned Life Insurance) and 45 Non-Life Insurance Companies(Including sadharan Bima Corporation – A Govt. Owned Non-Life Insurance) in Bangladesh. Afterthe independence of Bangladesh in 1971 the government nationalized the insurance industry in 1972
and consequently formed Jiban Bima Corporation (Life Insurance Corporation) and Sadharan Bima
Corporation (Non-Life Insurance Corporation). In 1984 government approved privatization ofInsurance Industry. Till 2012 there were 18 Life and 43 Non-Life Insurance organizations.
Government Adopted the National Insurance Rule (Jatiyo Bima Nity –):Bangladesh ranks as one of the world's foremost disaster-prone country recently. The situation
become worse, all the more by its being the most densely populated country in the World.
Environmental disasters like tropical cyclones, storm surges, floods, norwesters, tornadoes anddroughts ravage the country almost every year. Insurance mechanism in Bangladesh is less known orsometimes neglected due to ignorance but a vibrating sector in the finance. This sector remains
underdeveloped compared to that of neighbouring countries. Insurance coverage ratio 0.40% (4People have insurance policy out of 1000 People), insurance penetration rate 0.90% (Premium as %of GDP), insurance premium per capita BDT 352 (USD 4.40) [Source: Sigma Re Report 2008]. To
overcome the situation and build a strong economy the Ministry of Finance prepared the National
Insurance Rule.
FAIR Seminar in Bangladesh on Agriculture & Microinsurance and 1st SAARC Insurance
Regulator’s Conference 2013:Federation of Afro-Asian Insurers and Reinsurers (FAIR) and Bangladesh Insurance Association(BIA) jointly organized an International Seminar on Agriculture & Microinsurance on 10-11
February 2013. The objective of the Seminar is to explore the insurance opportunity in the field ofAgriculture and Microinsurance, implementing those opportunities as well as analyzing the potential
insurance risk. Creating public awareness and expanding the scope of the insurance organization toachieve the goal.
The Insurance Development and Regulatory Authority (IDRA) organized the 1st SAARC Insurance
Regulator’s Conference in 6-7 April 2013. The theme was – The Way Forward in the Wake ofGlobal Reality. Eight SAARC Countries insurance Regulators and delegates from insurancecompanies took part in this conference.
Information about the 2014 life insurance event schedule in Bangladesh
The current political situation in Bangladesh is unstable. So the schedule may be changed. Hopefully
it will be known in the middle of the March 2014.
Summarized by M. Ahsanul Haq a highly dedicated volunteer for the Actuarial and Insurance
Profession in Bangladesh. He is involved in the Research for the Mortality Analysis in Bangladesh,
Actuarial & Insurance Education and Training. He is the founding member as well as the Treasurerof the Actuarial Society of Bangladesh (ASB).

Korea

Revised Income Tax
The Ministry of Strategy and Finance revised the enforcement decree of the income tax act and othercorresponding regulations on February 15, 2013 to maintain tax-free marginal profit for long-termsavings-type insurance for whole life insurance products that cannot be used for tax evasion and formembers of the middle class who surrender their insurance policies because of emergencies. This
revision was designed to reinforce tax benefits for pension income, and improve the tax scheme forretirement allowance. All of these are intended to help the elderly acquire a stable source of income
as Korea becomes an aging society.
Online insurance sales set to expand further
For the first time in Korea on December 2nd, an online life insurer has launched its business. It isexpected to herald a new era for the online sales of life products. It targets tech-savvy young people,encouraging those in need of life insurance to search and purchase corresponding products bythemselves. Many life insurers are now introducing online products and brands. This online life
insurer maintains a structure where customers purchase, hold the policies and claim payments all
through online. It is assessed to have increased the pie for online-oriented life products.
The 49th Annual Seminar of the International Insurance Society Held in Seoul
The Korea Life Insurance Association, together with the General Insurance Association of Korea,
hosted the 49th IIS Annual Seminar at the Grand Hyatt Seoul from June 16 to June 19, 2013. Since
its establishment in 1965, IIS has been the world's most-renowned insurance conference. It has
around 900 members who are insurance CEOs, regulators and scholars from 90 countries.
Significantly, this year's IIS annual seminar was the second that Korea hosted in 26 years. This year,
the event was attended by around 430 people from supervisory agencies, insurance companies,associations, and universities. Under the topic of “The Future of Insurance: Reshaping the Industry
to Capitalize on Global Trends,” participants discussed landscape changes (low interest rates,demographic change), underlying opportunities and the role of insurance. The IIS Seoul Seminarserved as an opportunity to introduce the world to the advanced and globalized Korean insurance
industry, thus reinforcing the positive image and credibility of the industry.
Korea Life Insurance AssociationMalaysia

Concept Paper on Life Insurance and Family Takaful Framework
On 7 November 2013, The Central Bank of Malaysia released a concept paper on Life Insurance andFamily Takaful Framework for public consultation. The framework sets out various proposed
liberalized measures aimed at spurring the penetration rate of the insurance and takaful from thecurrent 54% to 75%.
As part of the liberalization of the market, the Concept Paper covers a wide range of areas including
operating flexibility, product disclosure, development of new delivery channels and increased
professional market practices that will support the long-term sustainable growth and development of
the life insurance and family takaful industry with increased value proposition to consumers.
As the market becomes more competitive, there will be a larger segment of more discerning
consumers demanding for more products and services to meet their needs. This affluent market
expects service to be delivered through new distribution channels that are most convenient to them.
LIAM set up 3 working groups to study the impact of the proposals whilst balancing the need forincreased level of professionalism and greater transparency in the provision of products and services.
On January 9, 2014 LIAM submitted its responses to the Concept Paper to the Bank.
Financial Services Act 2013
The regulatory and supervisory framework of Malaysia entered a new stage of its development as
the Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA) came into
force on 30 June 2013.
Both laws aim to help Malaysia maintain financial stability, strengthen the growth in the financial
system and the economy and provide adequate consumer protection. It is important for Malaysia toenable its financial system to move in step with the rest of the world as well as to respond its
demographic change. The FSA and IFSA integrate several existing laws, namely the Banking andFinancial Institute Act 1989, Islamic Banking Act 1983, Insurance Act 1996 Takaful Act 1984,Payment Systems Act 2003 and Exchange Control Act 1953. The laws also enable Bank Negara
Malaysia, Malaysia’s central bank, to exercise the necessary regulatory and supervisory oversightpowers.
The new legislations provide explicit powers for the Bank to set and enforce standards on businessconduct for financial service providers that ensure financial consumers are treated fairly. The lawsalso specifically prohibit financial service providers from engaging in unfair or deceptive businessconduct including making false, misleading or dishonest representations, and tied selling.
Among the highlights of this new legislation is the enhanced protection given in respect toconsumers' pre-contractual disclosure obligations contained within the consumer insurance contracts.
It is now the duty of insurers to request the proposer to answer specific questions to solicit
information which is relevant to their decision making as to whether they should accept the risk orotherwise.
The legislation also sets out various remedies that an insurer may rely upon depending on the type ofpre-contractual misrepresentation made by the consumers.
With greater transparency in mind, the new laws contain provisions that address directorship andholding companies whilst also specifically compelling insurers to operate either as a life or generalentity and not as composites within 5 years.

Personal Data Protection Act 2010
In keeping with international business practice, the Personal Data Protection Act (PDPA) wasenforced with effect from 15 November 2013. Under the PDPA, the collection, possession andprocessing and the use of personal data by any person or organization will now be regulated. A set ofcommon rules and guidelines will be introduced to provide adequate security and privacy inhandling personal information. Non-conformance with the Act may result in penalties from financial
to legal liabilities.
In preparation for the implementation of the Act, LIAM formed a task force comprising senior legal,operations and compliance personnel from member companies to review the impact of the Act on
the industry and also to draw up the Code of Practice for the industry. LIAM would be submitting
the Code to the Commissioner to self-regulate the processing of personal data in the industry.
Life Insurance Association of Malaysia
The Malaysia Insurance InstituteTaiwan

The first insurance industry withdrew case processing is completed over the past 40 years
Kuo Hua Life Insurance its financial condition deteriorated remarkably in recent years due to poor
management resulting in the capital adequacy ratio below the legal standard. The competentauthority assigned the Insurance Stabilization Fund as receiver to take over of Kuo Hua Life, Its
underlying assets, liabilities and business sale by public tender from the TransGlobe Life settled
down, and completed the migration by TransGlobe Life On March 30, 2012. This is the first finishedprocessing withdrew case of the life insurance industry for dealing with financially distressed
insurers since the 1970s Guo guang Life case in Taiwan.
The life insurance companies conducted Mergers and acquisitions successively
Because of the impact of financial tsunami and the capital requirements for the insurance industry
after the implementation of the International Financial Reporting Standards (IFRS), the mergers andacquisitions situation still appear among life insurance companies this year, including Allianz
Taiwan Life merged the inforce business of HSBC Life (completed in June 2013), the CTBC Life
will merger Manulife ( International) Limited, Taiwan Branch (will complete in January 2014),
Otherwise, the acquisition of Taiwan Life by CTBC Life have been finalized.
Amendment Act to expands scope of overseas investment by insurance firms
In order to achieve the policy objectives of heighten the efficiency of Insurance capital utilizationand expand the pipeline of insurance capital utilization this year, FSC amended the related laws andregulations of the insurance industry successively to expand scope of overseas investment byinsurance firms. Including those insurance companies meet certain eligibility criteria, will be able toinvest in foreign credit rating agencies rated as BBB grade, BBB-and BB + grade level or equivalent
grade corporate bonds, via in real estate in foreign countries and mainland China through a special
purpose vehicle, as well as the relaxation of the qualifications and the scope of investment with thereal estate and bonds commodities in the mainland regional, and participated in public construction
as well as proposed regulations .
The Life Insurance Association of the Republic of China

Uzbekistan

One more tax remission for the development of long term life insurance
Government of Uzbekistan pays great attention for the development of long term life insurance. In
this purpose and for the increasing the social protection of the people were admitted the following
additional tax remissions:- tax remissions applied to individuals: sums of wages and other incomes of the physical person paid
as insurance premiums for the long term life insurance are not subject to taxation.
- tax remissions applied to entities: sums paid by legal person as an insurance premium for the longterm life insurances are referred to as other expenses;- the expenses of legal person paid as an insurance premiums for the long term life insurance are notreferred to as an income of physical persons.
Recently one more tax remission is admitted – in accordance with the changes made to the Tax Codeof the Republic of Uzbekistan on the December 25, 2013 insurance premiums for long term life
insurance are not subject to compulsory social charges (which is 3% of the base). This tax remission
allows life insurance companies to increase their efficiency and offer more attractive life insurance
products.
O'zbekinvest Hayot Life Insurance Company celebrates its 10th anniversary
O'zbekinvest Hayot Life Insurance Company was established in 2003 as the branch of Uzbekinvest
National Export-Import Insurance Company. The Company was registered on December 22, 2003.
The first License was given on February 13, 2004 by the Ministry of Finance of the Republic ofUzbekistan.
For now O'zbekinvest Hayot's share capital is equivalent of 3 mln Euro.
O'zbekinvest Hayot is the first company received the right of an activity in the field of mandatory
life insurance (particularly, annuity contracts accordingly to the Law of Mandatory Employer’ Civil
Liability Insurance).
10th anniversary of the founding of O'zbekinvest Hayot could be marked by the following results –for the period of 2008-2013 the volume of insurance premium is increased by 6.4 times, the volumeof investment – by 6.8 times.
Ministry of Finance Republic of Uzbekistan

Viet Nam

It was a successful year of Vietnam life insurance industry in 2013 as the growth was always
kept at high rate at 25.2% in the first 3 months; 23% in 6 months, 20,6% in 9 months and it isforecasted that the total collected premium in 2013 is about USD 1 billion, growth rate 15%.
This is such a desirable achievement of the industry in the context of economic downturn.
Ministry of Finance issued Circular No 115/2013/TT-BTC guiding on pension insurance andVoluntary Fund of Pension which was effective on 15/10/2013. This is the first legal document
about pension insurance in Vietnam which clearly defines pension insurance and set
requirements for life insurance companies to provide pension insurance. Dai-ichi Life andManulife were the 02 first insurance companies to launch the first pension insurance products inthe market while others are in the progress of designing their products.
Ministry of Finance issued Decree No 65/2013/ND-CP and Circular No 111/2013/TT-BTC
guiding on personal income tax (PIT), in which, there are 02 significant incentive regulations
for life insurance industry: The PIT on premiums paid into the employer-paid life insurance contracts and pensioninsurance contracts is deferred until the contract owners receive insurance payment and therate of taxation is 10% of the accumulated premium.
 The accumulated interest and investment earnings of pension insurance contracts are
exempted from PIT.
 The minimum taxable income of insurance agent is VND 9 million (about USD 428).
Association of Vietnamese Insurers

JapanJapanese Life Insurers overcoming the negative spread problem
According to the financial reports of the first six months (April to September) of FY 2013, theinvestment performance of 5 out of 9 leading life insurance companies in Japan exceeded thegoal, and the 9 companies made the combined total profit of 42.2 billion yen. It seems that theindustry is finally seeing the end of its negative spread problem that had become a burden ofmanagement over 20 years since the 1990s. Some of the factors include ① the averageassumed interest rate has fallen to 2~3 % from around 5% in the 1990s, ② insurance companies
have increased premiums and lowered assumed interest rates, ③the returns on investment inforeign equities have significantly increased due to a weak yen and high stock prices.
Ban on In-kind benefit to be lifted in 2014
Financial Services Agency is scheduled to partially lift the ban on providing in-kind benefits inlieu of insurance payouts in FY 2014. Specific examples of in-kind benefits are insurance
products that promise policyholders with a care service or the entering to a nursing home when
the policyholder becomes in a state which requires such cares or a funeral service at the time ofthe policyholder’s death. These services are to be carried out not through the life insurancecompany itself but a subsidiary or affiliates.
Japanese Life Insurers expanding the product line of nursing care insurance.
Japanese life insurance companies are focusing on the product development of nursing careinsurance. This is because the reduction of public nursing care insurance is expected amidst thenation’s financial deterioration; the demand for private insurance is increasing. It is also because
Japan’s insurance market is shrinking due to the population decline in addition to the decline ofthe demand for death insurance by an increase in single person or fewer children.
Oriental Life Insurance Cultural Development Center