TAKAFUL IKHLAS SDN BHD

PROPOSED REVISED IKHLAS MOTORIST P.A. TAKAFUL PLAN

1. BACKGROUND

The Motorist PA was rolled out in the first week of April 2006. The product provides cover against
bodily injury or death to drivers and passengers of the covered vehicle whilst entering, riding or
alighting from the said motor vehicle. The purpose of introducing the product is to increase the non
motor production as well as meeting the needs of the market for this product.

To-date, we have issued about 109 policies with a gross contribution of about RM 32,000.00. On
average, it is about 15 policies per month with an average contribution of RM 290.00 per policy or
about RM 4,400.00 per month. The marketing units have given their feedback that we needed to
enhance our current Motorist PA in order to make the product more competitive in the market and
to increase further production.

In this regard, the Underwriting Department has undertaken a study to compare our Motorist PA
against other similar product offered by other insurance companies or takaful operators in the
market. Our study found that our rates are reasonable based on the product features and sum
covered that was offered but not attractive to consumers due to the high contribution chargeable.
Besides, our product only offers one amount of sum covered i.e. does not have lower sum covered
values to enable consumers who wanted to have a lower sum covered protection at lower
contribution.

In view thereof, we have come up with a proposal to revise the product features and ratings to
allow a wider choice of cover for consumers to choose from. This way, we hope to increase the
Motorist PA production as the product would cater to a wider market than the previous version.

2. REVISED PRODUCT FEATURES

This product provides protection against accidental death or total permanent disablement to the
participant driver and the passengers due to road accident whilst travelling, alighting or entering the
covered vehicle. The revised product feature is to provide coverage up to 5 persons in the
covered vehicle (including the driver) as against the

Table of Benefit for Accidental Death/ TPD per person

Benefit PLAN
A B C D E
Death & Permanent 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00
Disablement
Loss of both hands or both feet 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00
Loss of sight of both eyes 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00
Loss of sight of one eye and 10,000.00 20,000.00 30,000.00 40,000.00 50,000.00
one hand or one foot
Loss of one hand or one foot 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00
Loss of sight of one eye 5,000.00 10,000.00 15,000.00 20,000.00 25,000.00

** Please refer to Appendix 2 for comparison of product features of existing and revised product

3) MODUS OPERANDI

As the main marketing channel of this product is ‘on-line’ to be sold together with the Motor Takaful,
it is designed in the simplest manner to avoid any future complication. Customer need only to

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 indicate to their respective agents, what Plan they have chosen for cover. The agents would then
tick √ in the appropriate box under the additional benefit section of the E-Cover Note. The
customer would then pay the total amount of contribution i.e. Motor plus Motorist P.A. contribution
including stamp duties. The agents would then print out the e-cover note as evidence of the cover
granted to the customers. The Motorist P.A. effective date shall follow the effective date of the
Motor takaful accordingly.

a) Step 1

Filling up the online Motor Takaful Proposal form

Agents / customers to fill up the normal Motor Takaful proposal form in FLAS for issuance of e-
cover note.

b) Step 2

Entering the Motorist P.A Cover field in FLAS

Agents/ customers will tick √ in the appropriate box should they wish to participate in the Motorist
P.A Plan.

Example:-

Please tick √ should you which to participate in Motorist P.A.

If the column is ticked √, another screen will come out, for example

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 c) Step 3

Data Capturing
After appropriate column has been entered, all relevant data from the FLAS will be
transferred to a screen.

Example:-

Name :- Zainal Abidin bin Abdul Aziz

I/C :- 650301-01-7068

Address :- No 5, Persiaran 2/3

Taman Bukit Mutiara
55300 Cheras,
Kuala Lumpur

Vehicle number:- WHL 3212

Make and Model:- Proton Wira 1.5

Period of Takaful: - 5 December 2004 to 4 December 2005 (commensurate with period of

coverage under Motor Takaful)

Coverage : - per vehicle including driver

Contribution:- - RM 200.00

Sum Covered per person :_- PLAN E (RM50,000.00)

Total Sum Covered:- RM 200,000.00 (per vehicle max 5 persons)

d) Step 4

Payment of Motorist P.A Cover

Participant will pay the contribution together will the Motor Takaful contribution. To avoid
complication, contribution must be paid immediately or within 7 days, together with motor
payment. IT department will have to create a field to split between payment for Motor
Takaful and Motorist PA for accounting purpose.

e) Step 5

Uploading of data into PREMIA

All the data captured in FLAS would be uploaded by IT to PREMIA on daily basis. Manual
data entry by underwriting staff would not be required as data are input into the
underwriting screen and approved automatically by the system. A weekly contribution
report is to be sent to Underwriting department every Monday or the next working day,
where appropriate. Upon successful uploading and approval, underwriting will then print
the individual certificate and send to the respective customers within 7 working days.

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4) SPECIAL FEATURES:

a) One Fixed Unit Contribution

Contribution is fixed for each sum covered band. Sum covered varies from one Plan to
another with a total maximum participation of 5 persons per vehicle inclusive driver.
Additional persons are subject to additional contribution (please refer to Table under
Appendix 1). Maximum number of persons allowed per vehicle subject to JPJ regulations
per vehicle registration card.

b) Auto Acceptance
This product does not require underwriting.

5) UNDERWRITING CONSIDERATION

Issue Ages : 1 – 75 years, age next birthday,

Occupational class 1, 2 & 3

Issue Limits : Auto underwriting for all cases within the given parameters. Any cases
that do not fall within the parameters are to be referred to the Underwriting
Department.

Coverage Terms : Annual cover

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Appendix 1

Subject: Product Features of Revised Motorist PA

Product Features
1 Cover would be on per vehicle basis instead of per person basis.
Benefits are structured according to different tiers - different levels of sum covered
2
under the different Plan.
Sum covered applicable to each covered persons travelling in the vehicle is according
3
to Plan selected.
4 Each Plan (sum covered) would have different contribution applicable.
5 Number of persons covered per vehicle limited to 5 (inclusive driver/authorized driver).
6 Additional persons allowed subject to additional contribution (RM10.00 each).
Maximum number of additional persons subject to the seating capacity permitted
7
under JPJ's rules and regulations.
8 Age limit - 1 to 75 years
9 Occupational Class - all except 4

Benefits Plan and Contribution Table

Plan Contribution per vehicle Sum Covered per person

A 40.00 10,000.00
B 80.00 20,000.00
C 120.00 30,000.00
D 160.00 40,000.00
E 200.00 50,000.00
Note:
a Above contribution not inclusive of stamp duty & service tax
b Limit of person per vehicle 5
c Additonal pax* RM10.00 per person
(subject to max seating capacity allowed under JPJ rules)

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 Appendix 2
Comparison of the product features between existing and proposed revised Motorist PA
Existing Motorist PA rating and benefit structure
(Product Features)
1 Cover and benefits on per individual basis.
Contribution is based on number of persons to
2 2
be covered.
3 Single tier sum covered limit for each person.
4 Covered persons: min - 1; max - 6
5 Age limit - 1 to 65 years
6 Occupational Class - all except 4
723267302.doc
Revised Motorist PA rating and benefit structure
(Product Features)
Cover would be on per vehicle basis instead of
1
per person basis.
Benefits are structured according to different tiers
- different levels of sum covered under the
different Plan.
Sum covered applicable to each covered persons
3 travelling in the vehicle is according to Plan
selected.
Each Plan (sum covered) would have different
4
contribution applicable.
Number of persons covered per vehicle limited to
5
5 (inclusive driver/authorized driver).
Additional persons allowed subject to additional
6
contribution (RM10.00 each).
Maximum number of additional persons subject to
7 the seating capacity permitted under JPJ's rules
and regulations.
8 Age limit - 1 to 75 years
9 Occupational Class - all except 4
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