Extracts from the address of the Chairman,

YM Tunku Ya'acob Bin Tunku Abdullah

at the Twenty-Fourth Annual General Meeting on 28 March, 1997

Review of MNRB's Cessions and Retrocessions

During the year, our Executive Committee continued to look after the interests of member companies in the context of cessions to and retrocessions from MNRB.

MNRB was listed during the last quarter of 1996. With its public listing, many of our members particularly the pioneer members have experienced good appreciation of their investments. This reflects well on the growth of MNRB as well as the role that our Association has played since its inception.

During the year, 4 members of our Executive Committee were nominated by you to serve on the Board of MNRB to represent your interests.

For the year, the representation was made by:

a. YM Tunku Ya'acob bin Tunku Abdullah
b. Encik P Raveenderen
c. Encik Raymond Wong
d. Encik Ali Yusoff

However, following the listing of MNRB on the KLSE, our Association no longer has the right, by MNRB's revised Memorandum and Articles of Association, to appoint its representatives on the Board. As such, members will note that at our AGM, we will no longer be conducting an election to nominate Board members to MNRB. The existing 4 board members will retire by rotation and any nominations can be made in accordance with the M&A of MNRB at its AGM.

Reinsurance Business with Japan and Greater Reinsurance Locally of Japanese Business in Malaysia

The development of reinsurance business with Japan initiated by NIAM 8 years ago is ongoing with the participation of 5 major Japanese insurance companies and 7 of our member companies.

This is managed by MNRB and I would like to thank them for their efforts.

Our Association has played an active part as a member of the Malaysia Japan Economic Association (MAJECA). We were represented at their 1996 conference in Kuala Lumpur by 3 of our Exco members. Tuan Haji Sulaiman Salleh presented a Paper on behalf of our Association in which he highlighted the present low retention level of Japanese industrial risks in Malaysia and had expressed the need for greater retention and facultative exchange of business. Tuan Haji Sulaiman also highlighted that there should be the establishment of one or two Japanese reinsurance companies in Malaysia on similar basis to the six other foreign reinsurance companies that have set up branches here.

Life Insurance Business

Our Exco continues in its efforts with Bank Negara, and with their guidance, with the Securities Commission and other bodies, for greater participation of our member companies in the life insurance sector as well as a broader range of products that they can offer.

During our last meeting with Bank Negara, the Senior Officers mentioned that there is a possibility of them considering a slightly higher rate of interest for the computation of the actuarial liability from 4%-5% on the condition that the additional surplus arising thereon should not be distributed to the shareholders. Todate, no firm decision has been taken by BNM. The insurance regulations have been issued without the incorporation of these terms, but it is our Association's intention to continue to pursue these matters.

I am also happy to mention that our Association followed up on behalf of our life member companies on the approval for the opening of branches and the conversion of agency offices to branch offices. Bank Negara subsequently accepted our proposal and as our members are aware, BNM has given approval to many of our life member companies.

Education and Training

Our Association continues to give attention to high level education and training for Managers and Top Management.

In this context, we had organised 3 Managers seminars conducted by Professor Jose Faustino of the Asian Institute of Management from the Philippines. The seminars were well attended and considered beneficial by the participants. In addition to the above, we also had a seminar on "Financial Analysis for Non-Financial Executives" by Associate Professor Wan Abdul Rahman from Universiti Pertanian. This seminar was targeted for Managers to give basic understanding of accounting and financial matters.

For the coming year, our Exco has planned a total of 8 seminars including a Top Management seminar, planned a business visit to Germany from 25 May to 4 June. Our Association had also conducted a business visit to China in 1993 and to Australia in 1995.

Marine Insurance

During the year, our Association continued with its efforts for a greater share of marine insurance business to be placed in the country. In this regard, we had a number of meetings with senior officials of Treasury and Bank Negara with the objective to have greater local placement of marine insurance on imports particularly by NFPEs (Non Financial Public Enterprises).

Once the scheme is approved by the Treasury and Bank Negara, our Exco looks forward to the support of our member companies to participate in this scheme which will benefit all of us as well as ensure greater retention of premiums within the country.

NIAM RI Club

At the beginning of last year, our Exco considered at length ways our member companies can meet the Government's objective of greater retention as well as increase their capacity and co-operation.

As you are aware, NIAM have had regular cocktail receptions under the banner of the NIAM RI Club.

In order to achieve the objective, invitation to these functions were restricted to 3 persons from each member company namely the Principal Officer, the Senior Manager and the Reinsurance Manager.