1. A life assured who is a bachelor names his parents as the nominees under his life policy, will the trust be automatically revoked when the life assured subsequently gets married (i.e. after the nomination made) ?
   
2. If a nomination is made after the issuance of the policy, is it necessary for the policy owner to forward the policy document to the insurer to make the necessary endorsement?
   
3. Can a policy owner appoint himself as the sole or joint trustee of the policy moneys?
   
4. If a policy owner who is the sole trustee dies, can one of the nominees competent to the contract take over the trusteeship?
   
5. If no trustee is named, who can act as trustee?
   
6. If at the time of death there are 4 nominees namely the spouse and 3 children to whom is the policy moneys payable ?
   
7. Can a policy owner create a trust in favour of his parents, although he has a spouse or child living at the time of nomination?
   
8. If a nominee dies after the death of the policy owner but before any policy moneys is received by him how will the policy moneys be paid?
   
9. If the policy owner names his parents as nominees, while he has spouse and/or children at the time of making such a nomination, would this create a statutory trust?
   
10. If the nominees are spouse and brother, a trust is created in favour of the spouse only. Does a half trust exist?
    
11. What would happen if at the time of making a nomination, the policy owner is a non-Muslim but he subsequently converts to Islam? What is the position of the first wife if she is still a non-Muslim?
    
12. Should the insurer maintain the change of address of a nominee?
    
13. Is the trustee's consent sufficient to revoke the nomination of a minor nominee?
    
14. Although a trustee's written consent is necessary when the policy owner deals with the policy, the trustee has no power to surrender, revoke a nomination or otherwise deal with a policy by himself because he is not the policy owner. A trustee can only deal with the policy moneys and when they are paid. Would this conflict with the powers of trustee?
    
15. What if policy owner wants to change the nominee?
    
16. Assignments may be either conditional or absolute. Would absolute assignment be applicable to Muslim? If the Muslim life assured dies, can the policy moneys be paid to the assignee ?
    
17. How can a policy owner ensure that a non-natural person (e.g. company or charitable organisation) receive the policy benefits beneficially?
    
18. Does nomination has to be made at New Business stage?
    
19. Is it compulsory to submit photocopy of IC/BC of the nominee?
    
20. Is the Insurance Act 1996 applicable to old policies (ie.pre-1997)?
    
21. In case of a child policy, if the policy owner does not purchase the LT or ADD riders in the policy, is it possible for the policy owner to effect nomination ?
    
22. If the policy is assigned to the bank, can the policy owner nominate an individual for the remaining policy money ?
    
23. Can a new nomination form submitted supersede the existing nomination made or must the Revocation of Nomination form be submitted?
    
24. At the time of effecting the nomination, if the policy owner does not want to nominate any trustee(s), can he put a slash at the trustee column ?
    
25. Can a child policy be assigned ?
    
26. Can a keyman policy be assigned to the bank/individual ?
    
27. Is it possible to assign a policy to a minor ? If it is possible, how would the minor be giving the consent at a later stage?
    
28. Will the proceeds be payable once a person commits
    
29. Will the proceeds be payable once a person commits
    
30. Sec 25 CLA 1956 "Nothing in this part shall affect the disposal of any property according to Muslim or, in Sabah and Sarawak, native and custom. What are the implications on policy owners from Sabah and Sarawak,? Are they allowed to appoint trustee?
    
31. PremierCare Policy (Adult Plan). Father is the owner, can nomination be done in favour of a child (under 18 years old)? If so, who can be nominated?
    
32. Customer wishes to nominate wife, child, parent and brother, and appoint the parent as Trustee(s). With the above combination, can we process the nomination. If so, who will be the beneficiary, executor or trustee.
    
33. Customer wishes to nominate wife, child, parent and brother.. With the above combination, can we process the nomination. If so, who will be the beneficiary, executor or trustee.
    
34. Clauses No 8 Section A & No 9 Section B of the nomination form indicates that assignment is allowed. Can a nomination be made after an assignment for purposes of security for mortgage (to financial institutions) has been processed?
    
35. If trust is created and no trustee is named, the role of the trustee is assumed only upon payment of policy moneys or upon appointment?
    
36. For our child policy, where the parent nominates, the relationship of the nominee is toward the Child or Owner?
    
37. How many nominees should we allow? How many trustees should we allow?
    
38. Can nomination be made for a life policy under Section 23 of the Civil Law Act 1956?
    
39. Can policy owner nominate himself/herself as nominee?
    

1. A life assured who is a bachelor names his parents as the nominees under his life policy, will the trust be automatically revoked when the life assured subsequently gets married (i.e. after the nomination made) ?
   No, the trust in favour of his parents shall remain (i.e. is not revoked) even though there is a subsequent marriage.
   
   
   
   
2. If a nomination is made after the issuance of the policy, is it necessary for the policy owner to forward the policy document to the insurer to make the necessary endorsement?
   No, the insurer can issue an endorsement.
   
   
   
   
3. Can a policy owner appoint himself as the sole or joint trustee of the policy moneys?
   Yes
   
   
   
   
4. If a policy owner who is the sole trustee dies, can one of the nominees competent to the contract take over the trusteeship?
   The personal representative of the sole trustee can continue to act as trustee. If the personal representative does not want to act as trustee, he/she can either appoint a new trustee or apply to the High Court for such appointment.
   
   
   
   
5. If no trustee is named, who can act as trustee?
   One or more of the nominees competent to contract shall be deemed the trustees of the policy. All competent nominees would become trustees and they are required to act on consensus basis. If there are no competent nominees, the parent of an incompetent nominee can act as trustee. If there are no parents surviving, the Public Trustee shall be trustee of the policy moneys.
   
   
   
   
6. If at the time of death there are 4 nominees namely the spouse and 3 children to whom is the policy moneys payable ?
   In the absence of an appointed trustee, the policy moneys is to be paid to the competent nominee who is deemed to be the trustee, i.e. the person(s) stated in the Answer to Question 5. If a trustee is appointed by the policy owner then payment must be made to the Trustee(s).
   
   
   
   
7. Can a policy owner create a trust in favour of his parents, although he has a spouse or child living at the time of nomination?
   Yes, he can do so by executing a trust deed (i.e. non-statutory trust). It is advisable that this be done through his lawyer.
   
   
   
   
8. If a nominee dies after the death of the policy owner but before any policy moneys is received by him how will the policy moneys be paid?
   For trust cases, the policy moneys shall vest in the estate of the deceased nominee. In non-trust cases, the surviving nominee(s) takes the share beneficially if an assignment is made in his favour. Otherwise, on receipt of his shares, he has to distribute the same to the lawful beneficiaries of the deceased policy owner. If there is no surviving nominee, the policy moneys will revert to the estate of the policy owner.
   
   
   
   
9. If the policy owner names his parents as nominees, while he has spouse and/or children at the time of making such a nomination, would this create a statutory trust?
   No. A trust can only be created in favour of the parents, if at the time of nomination, he does not have a surviving spouse or child.
   
   
   
   
10. If the nominees are spouse and brother, a trust is created in favour of the spouse only. Does a half trust exist?
    Yes. Unless there is an assignment in favour of the brother, he will not receive the policy money beneficially but only as an executor. He will then have to distribute his share to the lawful beneficiaries of the deceased policy owner.
    
    
    
    
11. What would happen if at the time of making a nomination, the policy owner is a non-Muslim but he subsequently converts to Islam? What is the position of the first wife if she is still a non-Muslim?
    The religion at the time of the death matters. The marriage with the first wife is annulled if she does not convert to Islam. However, the nominee of a Muslim policy owner, regardless if he/she is a non-Muslim, must distribute the policy moneys in accordance with the Muslim Law.
    
    
    
    
12. Should the insurer maintain the change of address of a nominee?
    Yes, the address of the nominee is important. The onus is on the insurer to write to the nominee when notification of death of the life assured is received. The notification need not come from the nominee.
    
    
    
    
13. Is the trustee's consent sufficient to revoke the nomination of a minor nominee?
    If the trustee gives consent, the nomination shall be revoked. Under S.23 of the CLA, the trustee takes over the policy from the day the trust is created. However, under the new Act, the trust is only created in respect of the policy money payable. Therefore, the nominees only have vested interests when the policy moneys become payable.
    
    
    
    
14. Although a trustee's written consent is necessary when the policy owner deals with the policy, the trustee has no power to surrender, revoke a nomination or otherwise deal with a policy by himself because he is not the policy owner. A trustee can only deal with the policy moneys and when they are paid. Would this conflict with the powers of trustee?
    Under the new Insurance Act, the policy owner could only deal with the policy with the consent of the trustee. The trustee could withhold their consent when the rights of the beneficiaries are affected.
    
    
    
    
15. What if policy owner wants to change the nominee?
    A new "Nomination Form" is to be completed and shall supersede the earlier form as the percentage of share would have changed. The earlier nomination would have to be revoked by completing the "Revocation of Nomination".
    
    
    
    
16. Assignments may be either conditional or absolute. Would absolute assignment be applicable to Muslim? If the Muslim life assured dies, can the policy moneys be paid to the assignee ?
    Absolute assignment does not come under the ambit of Muslim Law i.e. Syariah Distribution Law with regards to property. Therefore, the ownership is deemed to be transferred and the assignee receives the policy moneys absolutely. This however is not applicable for conditional assignments.
    
    
    
    
17. How can a policy owner ensure that a non-natural person (e.g. company or charitable organisation) receive the policy benefits beneficially?
    The policy owner must do an assignment in favour of the non-natural person.
    
    
    
    
18. Does nomination has to be made at New Business stage?
    Not necessarily but it is encouraged. Nomination will enable us to settle claim fast.
    
    
    
    
19. Is it compulsory to submit photocopy of IC/BC of the nominee?
    No, it is not compulsory but is encouraged. The aim of keeping the photocopy of IC/BC of the nominee is for the company to verify the particulars of the nominee so that there will not be any future claim deferments relating to the identity and age of the nominee.
    
    
    
    
20. Is the Insurance Act 1996 applicable to old policies (ie.pre-1997)?
    TYes, the Insurance Act 1996 is applicable retrospectively to all life policies.
    
    
    
    
21. In case of a child policy, if the policy owner does not purchase the LT or ADD riders in the policy, is it possible for the policy owner to effect nomination ?
    Nomination under Section 163 only applies to a policy effected by the policy owner upon his own life but there is nothing to prevent any policy owner from nominating any beneficiary to receive the policy money in any other policies. For policies other than on one’s own life, the rules laid down in Part XIII of the Act will not apply.
    
    
    
    
22. If the policy is assigned to the bank, can the policy owner nominate an individual for the remaining policy money ?
    Yes. The nominee is entitled to the balance of the policy moneys not effected by the assignment.
    
    
    
    
23. Can a new nomination form submitted supersede the existing nomination made or must the Revocation of Nomination form be submitted?
    Any subsequent nomination will supersede and revoke the existing nomination. As a practice we encourage the policy owners to submit both the Revocation of Nomination form and a new Nomination form. However, in the event of Trust policy, consent of Trustee(s) will be required.
    
    
    
    
24. At the time of effecting the nomination, if the policy owner does not want to nominate any trustee(s), can he put a slash at the trustee column ?
    Yes. A trustee can be appointed at any time.
    
    
    
    
25. Can a child policy be assigned ?
    Yes. Any insurance policy can be assigned by the policy owner unless expressly excluded in the policy contract e.g. YippieCare.
    
    
    
    
26. Can a keyman policy be assigned to the bank/individual ?
    Yes, it can be assigned by the policy owner only.
    
    
    
    
27. Is it possible to assign a policy to a minor ? If it is possible, how would the minor be giving the consent at a later stage?
    Yes. If the policy is assigned to a minor, there is no question of consent involved.
    
    
    
    
28. With regards to question 21 would the answer be the same for our YippieCare policy’s "payment of policy moneys provision" clause. (enclosed)
    The "payment of policy moneys provision" being a contractual provision will be binding on you and you will be required to give effect to it. As stated earlier, there is nothing to prevent the policy owner in a child policy to nominate a nominee.
    
    
    
    
29. Note No. 4 under section A indicates that the nominees shall receive policy moneys in the capacity of executor and not as a beneficiary. With Sec 167 IA 1996, what is the implications of moneys payable for Trust, Non-Trust and Part-Trust policies.
    Section 167 only applies to non-trust and part-trust cases. If there is no assignment in favour of the nominee, the nominee receives the money as an executor and has to distribute the policy moneys according to the will, if any, or according the laws governing distribution in force.
    
    
    
    
30. Sec 25 CLA 1956 "Nothing in this part shall affect the disposal of any property according to Muslim or, in Sabah and Sarawak, native and custom. What are the implications on policy owners from Sabah and Sarawak,? Are they allowed to appoint trustee?
    Natives in Sabah and Sarawak are not precluded under the Insurance Act or the Trustees Act to appoint trustee(s) unless it is prohibited under the prevalent native law or custom.
    
    
    
    
31. PremierCare Policy (Adult Plan). Father is the owner, can nomination be done in favour of a child (under 18 years old)? If so, who can be nominated?
    The policy owner (father) can appoint any natural person, whether major or minor.
    
    
    
    
32. Customer wishes to nominate wife, child, parent and brother, and appoint the parent as Trustee(s). With the above combination, can we process the nomination. If so, who will be the beneficiary, executor or trustee.
    You can process the nomination. You have to pay the policy monies to all the named nominees according to the shares allocated to them. The parent and the brother, unless there is an assignment in their favour, will receive the money as an executor and redistribute the moneys to the wife and child according to the prevalent distribution laws. The parent will be the trustee for the trust moneys i.e. the moneys payable to the wife and child. The executor of the estate of the deceased policy owner would normally be named in the will.

    The policy owner cannot deal with the policy, i.e. revoke the nomination, vary or surrender the policy or assign or pledge it, unless with written consent of the trustee(s).
    

    
    
    
33. Customer wishes to nominate wife, child, parent and brother.. With the above combination, can we process the nomination. If so, who will be the beneficiary, executor or trustee.
    The answer will be same as Q 32 above.
    
    
    
    
34. Clauses No 8 Section A & No 9 Section B of the nomination form indicates that assignment is allowed. Can a nomination be made after an assignment for purposes of security for mortgage (to financial institutions) has been processed?
    A nomination can be made at any time but the nominee’ s entitlement to the policy moneys will be subjected to the assignment. The nominee will only be entitled to receive the balance, if any, after payment to the assignee.
    
    
    
    
35. If trust is created and no trustee is named, the role of the trustee is assumed only upon payment of policy moneys or upon appointment?
    If a trust is created under Section 166, and if no trustee is named and until a trustee is nominated, the nominee becomes the trustee and if he is incapacitated, the parent of the nominee, and if there are no surviving parents, the Public Trustee becomes trustee. The appointed trustee or the ‘trustee’ under Section 166(3) assumes his role upon issuance of the policy.

    In cases that does not fall under Section 166, if it is a trust policy, the trustee assumes his role upon appointment and if it is a trust for the policy moneys, then the trustee appointed will only assume his role upon the payment of the policy moneys.
    

    
    
    
36. For our child policy, where the parent nominates, the relationship of the nominee is toward the Child or Owner?
    The relationship of the nominee is always in respect of the policy owner and not the life assured.
    
    
    
    
37. How many nominees should we allow? How many trustees should we allow?
    There is no limit to the number of nominees. Only a maximum of 4 trustees can be appointed.
    
    
    
    
38. Can nomination be made for a life policy under Section 23 of the Civil Law Act 1956?
    Yes, nomination can be made for a life policy under Section 23 of the Civil Law Act 1956.
    
    
    
    
39. Can policy owner nominate himself/herself as nominee?
    No.

© 2001 MaybanLife. All rights reserved.