REPLACEMENT OF CERTIFICATE (ROC)

GREAT EASTERN TAKAFUL SDN BHD

01 November 2011

Definition of Replacement of Certificate (ROC)

Any transaction involving the participation of Family Takaful certificate if within 12
months before or after a new certificate is effected, an existing Family Takaful
certificate and existing Life insurance policy has been :

Lapsed, surrendered, withdrawn, or partially surrender

Reduce in value by the use of non-forfeiture benefit
Reduced contribution or removal of rider or reduce sum covered
Extended Term Assurance (ETA) or Automatic Premium Loan (APL)
(Applicable upon cross checking with GELM policy)

Replacement of Certificate Categories

There are two categories of Replacement of Certificate, Category A and Category B:
Category A
Replacement Type

Definition

Lapse

Ordinary Lapse

Surrender

Family Takaful Surrender

Investment Linked full surrender / withdrawal

Partial Surrender

Partial surrender of basic plan or rider

Surrender of rider/s

What happens when a policy/certificate is identified under ROC Category A?

Basic Commission and Overriding Commission will not be paid on the new certificate when
an existing certificate / policy is replaced under Category A.

Category B
Replacement Type

Definition

Reduce contribution > 25%

Reduce >25% in total annual contribution

(exclude expiry of rider, cancellation of rider due
to claim, conversion or extra contribution)

Automatic Premium Loan (APL) &

1st raised Automatic Premium Loan (APL) without

any full or partial repayment within 6 months

Extended Term Assurance (ETA)

(For GELM policy only)

Convert to Extended Term Assurance (ETA)

What happens when a Certificate is identified under ROP Category B?

No claw / hold back of commission if consent received from certificate holder. However
if the ROC letter is not signed or returned, commission will be clawed back and agent
will get zero commission.

Types of Certificates affected by ROC

Family Takaful
IL Family Takaful
Traditional Family Takaful

Types of Certificates NOT affected by ROC

Single Contribution Traditional Term
Single Contribution IL
Medical Plan
Group Certificate

FAQ on Replacement of Certificate

Q1 Is BNM ROC guidelines applicable to GETSB business?
Yes
Q2 Is the definition of ROC the same for both Conventional and Takaful certificate replacements?
Yes
Q3 Is ROC applicable when a GETSB New Business replaces GELM existing policy/s?
Yes
Q4 Is ROC applicable when a GELM New Business replaces GETSB existing certificate/s?
Yes
Q5 Can an agent affected by the ROC appeal to be exempted from being penalised?
Yes.
Provided the new certificate/s is to benefit of the policyholder. The process for appeal is similar
to GELM life policy/s.

Q6 What happens if a Muslim replaces a Smart Protect or Great Protect with i-Damai?
It will be considered as ROC even if the reason given is "to invest in a Syariah compliant fund"
as there are also Syariah compliant funds available in GELM. Appeals for such cases will not be
entertained.
Q7 Is ROC applicable to GETSB New Business when there is a replacement in the other
Takaful or Life Insurance Companies?
Yes.
This is as agreed by LIAM and MTA (Malaysian Takaful Association). However, as is practiced for
Inter Company ROP in the Life Insurance Industry, action will only be taken upon receipt of
complaint. Appeals will not be allowed for Inter Industry ROC/ROPs.

THE END