Treat Customers Fairly

(TCF) Framework and

Guidelines
1 January 2021

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Table of Contents
105

❖ Introduction

❖TCF Principles

❖ TCF Objectives

❖ TCF Minimum Standards

TCF Framework and Guidelines E-Learning Rev02 01.01.2021 2

Introduction to Treat Customers Fairly (TCF) 105

Treat policyholders fairly throughout

the sales cycle

Product Design suitable for customer

TCF Framework profile and fair policy conditions and
after-sales service for the customer

Board of Directors of Insurers to

emplace policies and procedures to
support TCF

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 105
Treat Customers Fairly (TCF) Principles

The principles behind TCF are three-fold:

❖To avoid mis-selling

❖To ensure fair terms and conditions

❖ Give customer freedom of choice

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Treat Customers Fairly (TCF) Objectives 106

❖ Consider consumer related issues during product

Development and Authorization process
❖ Products sold based on customer suitability, needs
and risk appetite
❖ Full disclosure to customers on products, risks,
exclusions
❖ Equitable Fees and Charges
❖ Well qualified agents/staff in investment and savings
products
❖ Non-biased commission structure
❖ Safeguard customer information
❖ System for resolving and monitoring customer
complaints

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Minimum Standards: Ensure Customer-Related Issues and Implications
106
Incorporated Within Product Development and Authorization Stages

Companies have proper procedures / processes throughout

product cycle:
❖ Unbiased commission structure

❖ Proactive customer suitability assessment

❖ Complaints monitoring and resolution

system

❖ Agents with good product knowledge

(training / mentoring)

❖ Clear, easily understood customers’

materials

❖ System to safeguard customer information

❖ Full disclosure to customer

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Minimum Standards: Ensure Effective Measures for Monitoring and 106
Resolving Customer Complaints

Minimum standards for dealing with complaints on mis-selling:

❖ Written complaints handled according to BNM

Guidelines on Complaints Handling
❖ “Welcome Calls” to detect potential mis-selling
❖ Conduct surveys to identify mis-selling practices
❖ Training based on MQC for Life agency force
❖ Disciplinary action (warning letter, termination for
mis-selling, blacklisting report to LIAM
❖ Observe BNM requirements for Management to
collect data on mis-selling cases

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Minimum Standards: Ensure Effective Measures for Monitoring and 106

Resolving Customer Complaints

Minimum Standards on Processing time:

❖ Companies continuously monitor processing time.

❖ Conduct processing time internal reviews, monitor
complaints on delays and prioritize for improvement.
Benchmarks for Processing Time:
❖ 7 working days - Underwriting standard cases with
complete documents
❖ 14 days for policy delivery – upon policy set in-force
❖ 7 working days - Claims settlement with complete
documents
❖ Companies to monitor and analyze complaints report
to improve turnaround time
❖ Monitor complaints on products to identify mis-selling

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Minimum Standards: Ensure Customers are Fully Informed 106

Minimum Standards: Ensure Customers are Fully Informed

❖ Approved Marketing materials

❖ “Welcome Calls” by Company Staff or authorized parties
❖ Information Disclosure per Product Transparency and
Disclosure guidelines
❖ “Welcome Calls” – highlight key product benefits,
risks, exclusions. Confirm customer’s health
declaration, explain implications on non-disclosure
of material fact
❖ Comprehensive product training (key benefits, risks)
❖ Product Disclosure Sheet (PDS) – proof customer
aware of product benefits, risks, exclusions,
TO waiting period
CUSTOMERS

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 Minimum Standards: Ensure Customers are Fully Informed 106

Minimum Standards: Ensure Customers are Fully Informed

❖ Customer Fact Find – suitable advice at pre-contractual

stage per Proper Advice Practices for Life Insurance
Business. Option 4 – will be removed.
❖ Observe BNM guidelines before reducing bonus or dividends
❖ Mandatory annual statements to policyholders of
investment/savings plans
❖ Sales Illustration - conservative fund growth, showing
impact of policy lapsing with projection of riders
policyholder wants
❖ Company advertisement materials - disclose true facts,
no misleading information.
TO ❖ Product disclosure sheet (PDS) mandatory - include
CUSTOMERS information useful to client and product specific.

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Minimum Standards: Ensure Products Sold Based on 106

Customer’s Suitability and Risk Appetite

❖ Companies - mechanism to evaluate customer

suitability and ensure agents follow procedures.

❖ Fees and Charges - commensurate with

Company cost incurred in selling and
maintaining products in compliance to
rules and regulations.

❖ Companies - conduct and maintain expense

analysis once every 3 years. Expense loadings
embedded in pricing supported by expense
analysis. If not a suitable benchmark must be
made.

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Minimum Standards: Ensure Agents and Staff are Well Qualified 106
and Properly Trained

❖ Internal assessments for new agents before selling products.

❖ Assessments via:
➢ Classroom training by company trainers.
➢ Product e-Learning
➢ Training by agency leaders
➢ Training by product line e.g. whole life, endowment,
term, investment-linked, medical etc.

❖ Training per Minimum Qualitative Criteria (MQC) for

Life Agency Force.
❖ Code of Ethics & Conduct course for agents.

❖ New products training for agents before selling.

Undergo existing products training once a year and
new products, twice a year. 1st year agents - minimum
10 hours product training before selling

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Minimum Standards: Ensure Agents and Staff are Well Qualified 106

and Properly Trained

❖ Minimum requirements for recruiting agents to comply

with LIAM’s MQC

❖ Senior agents - mentor junior agents for first three sales

or a minimum of 3 months

❖ Bancassurance – bank staff to undergo product training

and PDS to customers.

❖ Code of Ethics & Conduct course for agents.

❖ Agents to undergo new products training before

selling. Attend refresher course on existing products
once a year and new products, twice a year.

❖ 1st year agents - minimum 10 hours product training

before selling the product

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Minimum Standards: Ensure Agents and Staff are Well Qualified 106

and Properly Trained

❖ Ask customers reasons for policy surrender/ cancellation,

maintain records to improve services.
❖ Review agents’ persistency rate annually following
LIAM’s MQC of 1st year persistency of 85% for
contract maintenance.
❖ Monitor circumstances where policyholders opt for
unusual premiums/benefits arrangements. Safeguard
consumers interest and prevent financial manipulation
disadvantaging the customer.

❖ Ensure agents fully comply with Company’s selling

practices/rules for contract maintenance.

❖ Ensure customers have access to policy servicing

throughout policy duration. Inform customer if a
servicing agent resigns and provide a new point of
contact for policy servicing.

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Minimum Standards to Ensure Commission Structure Not 108

Excessively Biased Towards High Revenue Generating Products

❖ Same agency remuneration package for similar

products within same line to prevent hard-selling
or product pushing. Ensure remuneration
commensurate the effort put in.

❖ Recommend commissions paid on modal

premiums collected, not annualised premium.

❖ Prevent hard-selling, churning or other

mis-selling tactics. Proposal form include
question whether policyholder has other
policies in-force or lapsed within the last
2 years and whether policyholder faced
any unusual circumstances in the last 2 years.

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Minimum Standards to Ensure Customer Information 108

is Adequately Safeguarded

❖ Proposal form to have checkbox for customers’

permission before sharing their information
with third parties.
❖ Implement data encryption and authorized
personnel access to personal data.
Take action for data leaks.
❖ Non-Disclosure Agreement for customer data
transfer. Use data encryption/passwords
when transmitting sensitive data

❖ Sanctions against employees/agents to safeguard

customers’ information.
❖ Collect and monitor complaints on using customer
information as key management information.

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Other Minimum Standards 108

❖ Company to record and monitor claim rejection rates

(improve future customers’ understanding on
product features, benefits and exclusions)
❖ Independent claims committee to review
undetermined or referred cases by claims manager

❖ Decline letters in plain/clear language

to claimants explaining why claim declined.
Provide contact number for customers
seeking clarification on claims.
❖ Company to vet communication to customers
to ensure language simplicity. Have customer
service hotlines for policyholders’ enquiries
❖ Adopt ‘forward pricing at next available’
methodology and disclose in policy contract
or PDS if necessary to explain this approach.

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Thank you

AIA confidential
AIA confidential
and proprietary
and proprietary
information.
information.
Not for distribution.
Not for distribution.