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Just in Time & Activity Based Costing

Name : Baskaran s/o Muniandy 012011030080

: Deventhiran s/o Selladorai 012011030218

: Sharifah Zakiah binti WanYusop 012011050207 Subject : Basic Managerial Accounting

Subject Code: DAC0143

Lecturer : Madam Hani Soraya Ishak

INTRODUCTION

About PIDM

Perbadanan Insurans Deposit Malaysia (PIDM) is a lawful body

which is established under the Malaysia Deposit Insurance

Corporation Act (MDIC Act) in the year of 2005. PIDM is also known

as Malaysia Deposit Insurance Corporation (MDIC) around the globe.

The main purpose of PIDM is to manage the national deposit insurance

system in Malaysia. PIDM operates as a statutory body which protects

the depositors against the loss of part or all deposits in case

there is a failure of a member institution. They protect the

depositors by providing deposit insurance along with giving

protection for Takaful and Insurance Benefits System. Starting from

31st December 2010, PIDM’s role has been multiplied to manage the

Takaful and Insurance Benefits Protection System which is to protect

the owners of takaful certificates and insurance policies.

Other than that, promoting or contributing to the stability of

the financial system in Malaysia is part of PIDM’s mandates and

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objectives of PIDM. Incentives for sound risk management in the

financial system are provided by PIDM too. All in all, PIDM’s

mandate is to minimise costs to the financial system. In order to

make the mandates and objectives of PIDM a success, they are

established with missions and vision. One of mission is mentioned

above which is to protect takaful and insurance benefits. Other than

that, PIDM protects Islamic and conventional deposits as Malaysia is

an Islamic country based. To work effectively and efficiently to

fulfil their mandate is part of their missions. Lastly, to be the

best practice insurer is PIDM’s most achievable vision.

Furthermore, to achieve the missions and vision, PIDM have

corporate objectives and values. These corporate objectives and

values are for PIDM’s employees to be more productive, well-mannered

and intelligent. Some of the corporate objectives are stakeholders

must be educated, effective partnerships is required, competent and

knowledgeable workforce and last but not least is encouraging

corporate environment. All of that is mentioned will lead to a very

productive environment of working. The most crucial part of business

is to have values. All of us are aware that PIDM is a very

respectable body and for sure they have good values of corporation

too. Excellence and professionalism, respect and fairness, integrity

and trustworthiness and lastly is communications and teamwork. These

are the corporate values of PIDM that has now made PIDM a very

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famous company in which it has create a good name for Malaysia

internationally.

Functions of PIDM

First of all, all of us generally knew what does PIDM do and

now we are going to go deeper on their functions. The first function

is to measure and collect premiums or fees from banks are to be done

in which the officers in charged will start on counting the cost of

services made to put on a particular bank. The banks involved as

‘member banks’ are all commercial banks licensed under the Banking

and Financial Institutions Act 1989 and all Islamic banks licensed

under the Islamic Banking Act 1983. Foreign banks operating in

Malaysia are member institutions of PIDM too. Somehow, the

membership is compulsory as provided under AktaPerbadananInsurans

Deposit Malaysia. Secondly is the Deposit Insurance Funds is to be

managed by PIDM as in to maintain the total amount of money that is

deposited and to make sure it is in a very safe condition.

Thirdly, they accept resolutions of non-viable banks which is

somehow very risky but it will give them a worth it feedback.

Fourthly, repayment of depositors on should a bank become solvent or

not is made. This is when the consultation department is in charge

to make the best and wise decision. Fifthly, to have to comply with

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Shariah principles in respect of Islamic deposits and funds are

compulsory for them. Malaysia is an Islamic country so it is very

important to have this kind of principles in which money is earned

in an illegal way and is not Haram in Islam. Lastly, one of the main

functions of PIDM is to conduct continuous public awareness and

education initiatives. Nowadays, good education is the key of

success so the awareness in public is needed to make a country to

become a civilised country such as Malaysia.

Forget us not that to identify whether a bank is so called

‘member banks’ is to search for PIDM’s decal or sign at the front or

every entrance of the bank as membership is denoted by the decal.

Affin Bank Berhad, CIMB Bank Berhad, OCBC Bank (Malaysia) Berhad and

RHB Bank Berhad are some of the examples of commercial banks that

isthe member of PIDM. On the other hand, Bank Islam Malaysia Berhad,

Hong Leong Islamic Bank Berhad and Maybank Islamic Berhad are the

‘member banks’ of PIDM. Below are the sign or decal that you can

find on every entrance of ‘member banks’ door.

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For banks in Peninsular

For banks in Sabah

For banks in Sarawak

Benefit of PIDM

Beside that, MIDC provides many benefits to public from deposit

insurance. MIDC will protects depositors holding insured deposits

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with member banks. Deposit insurance protection is provided

automatically free to depositors. MIDC will promptly reimburse

depositors on their insured deposits in the event of a member bank

failure. : All commercial banks licensed under the Banking and

Financial Institutions Act 1989 and all Islamic banks licensed under

the Islamic Banking Act 1983. Membership is compulsory as provided

under Akta Perbadanan Insurans Deposit Malaysia

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Corporate Structure

Board of Directors

With a balanced representation from public and private sectors, PIDM

is currently governed by a seven-member Board of Directors. The PIDM

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Board ofDirectors

Chief ExecutiveOfficer

Audit andConsulting

CorporateSecretary Enterprise Risk

Management

Chief OperatingOfficer

Policy andInternational

Human Capital

Communication andPublic

Finance and Administra

StrategicPlanning

Legal Intervention andFailure

Insurance,Risk ,Assessment and

Act provides for the Board to have up to nine members in result with

PIDM’s expanded mandate recently. PIDM is also a lawful body which

reports to Parliament through Minister of Finance. Chief Executive

Officer (CEO) of PIDM is appointed by the Minister of Finance with

the good support and recommendation of the Board of Directors.

BOARD OF DIRECTORS: MEMBERS AND PROFILES

Tan Sri Datuk Dr. Abdul Samad bin Haji Alias (chairman)

Tan Sri Datuk Dr. Abdul Samad bin Haji Alias is

the Chairman of PIDM. A fellow of the Institute

of Chartered Accountants in Australia, Tan Sri

Abdul Samad had experience in auditing and accounting. He

is also the Chairman of Malaysia Venture Capital Management

Bhd and Malaysia Debt Venture Bhd, and was recently appointed

as an independent non-executive Director of Bursa Malaysia.

He is also a member of the Malaysian Institute of

Certified Public Accountants and the Malaysian Institute of

Accountants. In 2006 Tan Sri Datuk Dr. Abdul Samad received

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global recognition through the Association of Chartered

Certified Accountants’ Award for Achievement in Asia.

TAN SRI DATO’ SRI DR. ZETI AKHTAR AZIZ (member)

Tan Sri Dato’ Sri Dr. Zeti Akhtar Aziz, is

also one of the member of the board of

directors. Zeti Akhtar Aziz was appointed Governor of

Bank Negara Malaysia in May 2000. She has been with

the central bank since 1985, in a career spanning several

senior positions in monetary and financial policies, and

reserve management.  Dr. Zeti presided over the formulation

of the Financial Sector Masterplan, a 10 – year road map

for the development of the Malaysian financial system. During

her term as Governor, she oversaw the transformation of the

financial system, involving wide-ranging financial reforms, the

establishment of new financial institutions, strengthening of

the financial markets and the transition to a managed float

of the Ringgit exchange rate. She is also involved in the

international development of Islamic finance and in regional

financial co-operation.  

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TAN SRI DATO’ SRI DR. WAN ABDUL AZIZ WAN ABDULLAH (members

)

Tan Sri Dato’ Sri Wan Abdul Aziz Wan Abdullah also was one of the member of directors. Tan Sri Dato’ Sri Dr. Wan Abdul Aziz Wan Abdullah is the

Secretary General of Treasury, Ministry of Finance. He has 34 years of experience

in the public sector, most active in the area of economic planning. He started his

career at the Economic Planning Unit, Prime Minister’s Department in 1975, serving

in various capacities in the area of macro economy, humanresource and energy.

He also served as an Alternate Executive Director for theWorld Bank Group in

Washington DC, where he represented several Asian countries. He then returned to

Malaysia and served in the Ministry of Finance, and in 2007 he was appointed the

Secretary General of Treasury. He presently holds membership in the board of

directors for organizations such as the Federal Land Development Authority (FELDA),

Malaysia Airlines System Berhad (MAS), Petroliam Nasional Berhad (PETRONAS),

MISC Berhad, Kumpulan Wang Persaraan, Syarikat Bekalan Air Selangor Sdn. Bhd.

(SYABAS), Cyberview Sdn. Bhd., Pembinaan BLT Sdn. Bhd. and Bank Negara

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Malaysia. Tan Sri Dr. Wan Abdul Aziz holds a PhD in Economics from the

University of Leeds, United Kingdom.

DATO’ HALIPAH BINTI ESA (members)

Dato’ Halipah binti Esa is also one of the

member of directors in PIDM. She began her

service in the public sector at the Economic

Planning Unit (EPU) of the Prime Minister’s

Department in 1973. During her experience in EPU, she

served in various capacities in the areas of infrastructure,

water supply, energy, health, education, housing,

telecommunications, urban services, and macro economy. She

held various senior positions in the EPU and retired as

the Director General in 2006. She had also served in the

ministry of Finance as Deputy Secretary General. She is

currently the Chairman of Cagamas SME Bhd and serves on

the Boards of MISC Berhad, KLCC Property Holdings Berhad,

Malaysia Marine and Heavy Engineering holdings Berhad (MHB),

Northport (Malaysia) Bhd and the Securities Industry Dispute

Resolution Centre. She was previously Chairman of

PengurusanAset Air Berhad and has also served on the board

of UDA Holdings Berhad, Petroliam NasionalBerhad, Employees

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Provident Fund (EPF) and Inland Revenue Board (IRB). Dato’

Halipah received her Bachelor of Arts (Honours) degree in

Economics and a Master of Economics from the University of

Malaya. She also holds a Certificate in Advanced Economic

management from the IMF Institute, Washington and the Kiel

Institute for World Economics, Germany as well as a

Certificate in Advanced management Programme from Adam Smith

Institute, London.

MR. LIM TIAN HUAT (members)

Mr. Lim Tian Huat was selected as a Board

Member He is the Managaging Partner of Lim Tian

Huat & Co, Chartered Accountants and a licensed

auditor liquidator.He is a member of the

Malaysian institute of Accountants (MIA), Council Member of

the Malaysia Institute of certified Public Accountant (MICPA)

and also a fellow Member of the Association of Chartered

Certified Accountant (ACCA).He also holds a degree in BA

Economics (Honours).He has experience in corporate restructing,

recovery and insolvency. He was appointed as Commissioner to

the United Nations Compnsation Commission for a period of

five years from 1998 to 2002 and has co-authored the book

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“The law and Practise of Corporate Receivership in Malaysia

and Singapore”.Mr. Lim was a Partner of Ernst & young

(2002-2009) and Arthur Andersen& Co. (1990-2002). He is the

President of insolvency Practitioners Association of Malaysia

Mr. George Anthony David Dass (members)

He was also one of the member of directors in PIDM. Mr.

George Anthony David Dass was a partner at thelegal firm,

Shahrizat, Rashid & Lee, for over 25 years. Hehas extensive

expertise in conveyancing, banking, construction, joint ventures,

privatisation, contracts and corporate law. He had served as a director of several

public listed companies and was a Main Board Director of Costain PLC, one of the

oldest construction companies in the U.K. Currently, he continues to do some

consultancy work after stepping down from active practice in December 2004 Mr.

Dass was called to the Bar in Malaysia in 1971 and started his legal career in the

law firm of Ng Ek Teong & Partners. In 1975, he joined the Institut Teknologi MARA

as a lecturer in law. In June 1977, he went to London to pursue a Masters in Law

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and returned to legal practice in 1979.  Mr. Dass holds a law degree from the

University of Singapore and a Masters in Law (LLM) from Kings College, University

of London. He is currently a Board member of United Bintang Berhad and Montfort

Boys Town and is a Past President of the Rotary Club of Damansara.

Mr. Alex Foong Soo Hah (members)

Mr. Alex Foong Soo Hah has extensive experience in the insurance

industry, having served as the Chief Executive Officer (CEO) of

Great Eastern Life Insurance from 1996 to 2009and two other life

insurance companies prior to that. He has also served as president

of both the Life Insurance Association Malaysia and the Actuarial

Society of Malaysia. Currently, he also sits on the Boards of Bank Simpanan

Nasional and the Malaysian Insurance Institute. Mr. Foong holds a Masters of

Actuarial Science from the North Eastern University, USA, anda BSc Mathematics

from Universiti Malaya. He is also a Fellow Actuarial, Society of Actuaries, USA and

a Registered Financial Planner with the Malaysian FinancialPlanning Council.

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Executive Management Committee

The Executive Management Committee (EMC) is a forum for

discussion on daily issues of the operations and issues relating to

the management of PIDM. The Heads of Division is compromised by its

member and is also responsible for supporting the Board of Directors

in fulfilling its governance errands. Facilitating effective

communications, teamwork, adaptability to change and effective

collaboration throughout all areas of PIDM as well as a conduit for

information to all employees is intended by the EMC. PIDM’s

Executive Management Committee (EMC) is chaired by the Chief

Executive Officer who is not a member of the Board of Directors.

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EXCUTIVE MANAGEMENT COMMITTEE

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Jean PierreSabourine* Chief

Md Khairuddin Bin Hj Arshad** Chief

LimYam Poh** General Counsel and

Wan Ahmad Ikram Wan Ahmad Lofti**

Chief Financial Officer and General

Noorida Baharudin**Chief Internal Auditor and General Manager,Audit

and Consukting Services

LeeYee Ming**

Chief Risk Officer and General

Lim Kong Kuan General Manager,Intervention and

Lai Wai Keen General Manager,Policy and

Rafiz Azuan AbdullahGeneral Manager,Insurance,Risk Assesment and

S.Loganathan General Manager,Communications and

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Siti Zubaidah Haron General

Chua Ee Leen Senior

Deposit Insurance

First of all, we would like to thanks Mr Iswaran a million

times for giving a very remarkable and handy speech about deposit

insurance that is provided by Perbadanan Deposit Insurans Malaysia

(PIDM). The information given by him is very clear and can easily be

interpreted. Furthermore, he is prepared to answer any doubt that we

had. Let us just start from the beginning on what is deposit

insurance.

Deposit insurance system was initiated by United States in the

year of 1933 which is then followed by the Great Depression. Banking

crisis which transpired around the times lead to a significant

number of bank failures in 1921 until 1933. This happenings lead to

bank runs as the public confidence is shaken by the news of failing

banks. The bank runs is denoted when every account owner will

withdraw all of their savings in a specific bank account to make

sure their savings will not go down like how the bank will. In Hong

Kong, Bank of East Asia is one of the banks that experienced bank

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runs in September 2008. Another illustration of incident of bank

runs in the year of 2007 is the Northern Rock bank in UK. After the

disastrous event, there is a new enactment created namely Enactment

of Banking Act 1933 and there is also an establishment of Federal

Deposit Insurance Corporation (FDIC). The new enactment will somehow

restored public confidence and reduced bank runs. Deposit insurance

is now established in more than 100 countries: Taiwan, South Korea,

Japan, France, Canada and the Philippines. The good news is, to

date; there is no bank failure occurrence in Malaysia.

In Malaysia, the deposit insurance system is mandated by law

and managed by Perbadanan Insurans Deposit Malaysia (PIDM), a legal

body established in 2005. Deposit insurance is a system that gives

protection to depositors against the loss of part or all of their

insured deposit in case there is a bankruptcy of a bank or in other

words is bank failure. Contributing to the stability of a country’s

financial system is an integral part of a financial safety net. PIDM

is not linked to any general or life insurance companies; it is

legislated and administered by government instead in Malaysia.

Membership is compulsory for Bank Negara Malaysia and all banks in

Malaysia either it is licensed as commercial banks or Islamic banks.

Members of PIDM are called as ‘member banks’.

Since membership is mandatory, there are 25 licensed commercial

banks and 16 licensed Islamic banks in Malaysia. Some of the

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commercial banks which are listed as member banks of PIDM are Affin

Bank Berhad, Bangkok Bank Berhad, CIMB Bank Berhad, Hong Leong Bank

Berhad, RHB Bank Berhad, Standard Chartered Bank Malaysia Berhad and

United Overseas Bank (M) Berhad. On the other hand, Islamic member

banks which are member banks of PIDM are Al-Rajhi Banking and

Investment Corporation (Malaysia) Berhad, Bank Islam Malaysia

Berhad, Bank Muamalat Malyasia Berhad, HSBC Amanah Malaysia Berhad,

Maybank Islamic Berhad and OCBC Al-Amin Bank Berhad. There are non-

member institutions too such as investment banks, development

financial institutions and cooperative banks, and all non-bank

financial intermediaries.

Memberships are denoted by sticky label or in other term is

called as decal in which is a term that is rarely used. The sticky

label of PIDM can be found on every entrance of ‘member banks’. It

is divided into three different languages for different country. In

Peninsular Malaysia, it is in Tamil. In Sarawak, it is in Iban.

Lastly in Sabah, it is in Kadazan. PIDM is a multi language body so

there will be no prejudice on races.

There are limits and scope of coverage for deposit insurance of

PIDM. At first, PIDM only cover up to RM60, 000 only for per

depositor. It is then expanded up to RM250, 000 starting from last

year which is in 2010. Maximum of RM250, 000 per depositor per

member bank is allowed. PIDM covers 99% of depositors in full. It is

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automatic and no application is required. There will be separate

protection for conventional deposits such as Islamic deposits, joint

accounts and trust accounts. Overall, they provide protection for

accounts of sole proprietorships, partnerships or persons carrying

on professional practices. No additional insurance is available over

and above that is provided by PIDM.

One of the most important factors for deposit insurance of PIDM

is protection eligibility. Protection eligibility is requirements

for your deposits to be protected. Individuals and businesses are

eligible for protection but a deposit that is not payable in

Malaysia is not eligible for protection. Only saving accounts is

insured while a money market deposit is not insured. Repurchase

agreements is not insured and only fixed deposits or investment

deposit is eligible for protection of PIDM. Foreign Currency

Deposits is entitled for protection recently while unit trust is not

qualified for protection of deposits. Forget us not that current

account is for guaranteed eligible to be protected by PIDM but

negotiable instruments of deposit or other bearer deposits will not

be qualified for protection by PIDM.

To understand more about how much of your savings will be

insured by PIDM is by some instances. First example will be the

individual ownership of an account. To illustrate, Abu is the name

of owner of an account. His savings account contains RM25, 000,

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foreign currency deposits contain RM100, 000, current account

contains RM10, 000 and fixed deposit account contains RM100, 000. In

total, his deposits will be RM235, 000 in which the amount is below

RM250, 000 and so the total deposits insured by PIDM are RM235, 000.

RM235, 000 is fully covered because the maximum amount of deposits

for individual ownership of an account is up to RM250, 000. This is

to prove that an individual account savings will be insured maximum

up to RM250, 000 only.

Secondly, conventional and Islamic accounts will be

demonstrated. Name of the owner of the account is Zubaidah in which

her conventional savings is RM100, 000, conventional current savings

is RM100, 000 and foreign currency deposits are RM100, 000. Total of

her conventional savings will be RM300, 000. However, it is known

that the maximum amount covered by PIDM is up to RM250, 000 and so

only RM250, 000 is covered while another RM50, 000 will not be

covered by PIDM. On the other hand, Zubaidah has an Islamic account

savings sum up to RM280, 000. Again the amount is more than RM250,

000 and in conclusion the amount that will be insured is only up to

RM250, 000. A total of RM500, 000 will be insured by PIDM in the

combination of her two different accounts which is conventional and

Islamic accounts. This shows that PIDM can insure two different

types of banks under the same owner of account up to RM250, 000 in

respective bank namely conventional banks and Islamic banks.

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The very last illustration will be the joint accounts. Abu’s

conventional savings is RM300, 000 and insured amount will be RM250,

000 only. Then Abu and his wife open a new account under both of

their names which is counted as a different account than his

previous account. Both of them have sum up of RM300, 000 on

conventional savings and conventional current account half

respectively and only RM250, 000 will be insured. Next, Abu, his

wife and his son open up an account and had RM200, 000 savings and

it is fully insured by PIDM. Finally, Abu, his wife and his daughter

had a conventional savings amount up to RM100, 000 and so it is

fully insured too. This is due to that joint accounts held with

different people have different benefit on separate coverage of up

to RM250, 000 collectively and not per joint account holder.

Payment to depositors will be made in the event of a bank

failure. If a member institution fails, RM250, 000 will be

reimbursed to depositors in a period of time not later than three

months under the PIDM Enactment. Compensation is made based on

records of member institution. While for the uninsured amounts, a

claim of file with the member institution’s liquidator shall be made

by depositors. Fortunately, Islamic or Conventional Deposit

Insurance Fund will be paid to Islamic and conventional insured

deposits respectively. If there is a necessity, PIDM is able to

raise funds from Government or market so there is no high

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possibility that insured deposits cannot be compensated or

reimbursed.

Apart from that, PIDM has made a Provision of Information on

Deposit Insurance Regulations (Info Regs) in recent times this year.

In other words, there will be some requirements for member banks

under Info Regs that is effective on 1 April 2011. Member banks need

to inform the customers and share an acknowledgement from customers

about the insurability status of all deposit products whether it is

entitled or not entitled for deposit insurance protection. Customers

shall be provided with a PIDM brochure on deposit insurance all of

the time. On top of that, member banks have to display the PIDM

membership decal at branch offices, websites and screensaver or

homepage of ATMs. Finally, to make a clear representation on their

membership with PIDM in their advertisement is compulsory for member

banks.

In a nutshell, there will be a lot of benefits earned by

depositors as mentioned earlier, such as protection is provided

automatically at no charge to depositors. As said previously,

compensation will be made if it happens to be a bank failure of

certain banks. Providing information on deposit insurance to

depositors with easy access, promoting transparency among member

banks and enhancing financial customer protection are parts of the

benefits gained from the Info Registration.

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Takaful and Insurance Benefits Protection System (TIPS)

During the talk, Mr. Norfazli Izwan mentioned and explained

about a system called Takaful and Insurance Benefits Protection

System (TIPS). The Takaful and Insurance Benefits Protection System

or TIPS is a system created by the Government to protect takaful

certificate and insurance policy owners from their loss of their

eligible takaful and insurance benefits in the unlikely situation of

an insurer member failure. During that situation, PIDM will protect

takaful certificate or insurance policy owners based on the limits

and coverage provided by TIPS.

Membership

The protection is provided by PIDM automatically and no

application is required. There are no charges to be taken from

owners of takaful certificates and insurance policies for this

protection. In addition, membership for TIPS is mandatory for

takaful operators licensed under Takaful Act 1984 to carry out

family or general takaful business in Malaysia and insurance

companies licensed under Insurance Act 1996 to carry out life and/or

general insurance business in Malaysia. Despite this, there are

several institutions which were excluded from TIPS such as

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reinsurance companies and retakaful operators, international takaful

operators licensed under Takaful Act 1984, financial guarantee

insurer (for instance, Danajamin Nasional Berhad), offshore

insurance companies, and other key players in the insurance industry

such as insurance brokers and adjusters.

Member institutions are required to prominently display

this membership sign or decal at all the entrances to their offices.

Insurer Members

Currently, there are 36 insurance companies listed as PIDM’s

insurer member. Among them are Hong Leong Insurance Berhad, ING

Insurance Berhad, Etiqa Insurance Berhad, Kurnia Insurance Berhad,

Great Eastern Life Assurance Berhad, CIMB Aviva Assurance Berhad,

Allianz General Insurance Company Berhad, Allianz Life Insurance

Malaysia Berhad, Tokio Marine Insurance Berhad, Tokio Marine Life

Insurance Malaysia Berhad, AmLife Insurance Berhad, and many more.

In addition, takaful operators are also part of PIDM’s insurer

members. Currently, there are 11 of them which were listed. Of the

11 takaful operators are AIA AFG Takaful Berhad, CIMB Aviva Takaful

Berhad, Etiqa Takaful Berhad, Great Eastern Takaful Sdn. Bhd., Hong

Leong Takaful Sdn. Bhd., ING PUBLIC Takaful Ehsan Berhad, MAA

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Takaful Berhad, Syarikat Takaful Malaysia Berhad, and Takaful Ikhlas

Sdn Bhd..

Scope of Coverage

According to PIDM, those which were protected under TIPS

include individuals, sole proprietors/sole traders, partnerships,

trade unions, registered societies, cooperatives, registered

charities and corporations. Besides that, benefits which were

protected under individual certificate/policy and group

certificate/policy will be calculated separately in reaching at

maximum limit. Moreover, protected benefits will be aggregated only

if they have in common to “same insurer member, same risk event,

same life insured or insured property, and also same takaful

certificate or insurance policy owner.” However, additional

insurance is not available over and above that was given by PIDM.

PIDM will pay for medical if the insurance agencies bankrupt but

will deduct from payment that have to pay depositors.

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Benefits Protected under TIPS and Related Limits and Scope of

Coverage

Benefits protected under TIPS and related limits and scope of

coverage include:

Family Solidarity Takaful

and Life Insurance

Benefits Protected Limit (Individual or

Group)

Death and related benefits RM500,000

Permanent disability RM500,000

Critical illness RM500,000

Maturity value (excluding unit portion of

investment-linked policies)

RM500,000

Surrender value RM500,000

Accumulated cash dividend RM100,000

Disability income RM10,000 per month

Annuity income RM10,000 per month

Medical expenses 100% of expenses

incurred

Refundable prepaid premiums 100% of amount

prepaid

Persons eligible are takaful certificate/insurance policy owners of RM-

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denominated Malaysian policies.

General Takaful and

General Insurance

Benefits Protected Maximum Limit

(Policies/Plans)

Loss of or damage to eligible property RM500,000 per property

Death and related benefits RM500,000

Permanent disability RM500,000

Critical illness RM500,000

Disability income RM10,000 per month

Medical expenses 100% of expenses

incurred

Refundable prepaid premiums 100% of amount prepaid

Claims by eligible third parties are also protected under TIPS

subject to the above limits.

Persons eligible are takaful certificate/insurance policy owners of

RM-denominated Malaysian policies.

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Aggregation Rule

There are four rules of aggregation that PIDM is using on

aggregating the policies. The following rules are same insurance

company, same policy owner, same risk event, and same life insured

or property insured.

Benefits Not Protected under TIPS

There are several benefits which TIPS will not protect. Among them

are takaful certificates and insurance policies denominated in

foreign currencies, loss or damage to intangible property, and

investment portion of investment-linked certificates or policies.

Public Awareness

To be a well-known company around the globe, PIDM had made a

few steps and programs to keep the public to be aware of the

existence of PIDM and what PIDM does as a legal deposit insurance

company. Public awareness can increase public confidence and

financial stability through financial consumer protection for

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deposits and insurance policies in advance. Other than that, public

awareness is crucial to make sure that public understands the

advantages and disadvantages of the protection provided by PIDM.

There will be limitations too. This is due to make the public to be

informed in advance and financial decisions can be made properly

without any hesitation. Finally, it is to promote market discipline

so that PIDM can be a good role model for other deposit insurance

company.

PIDM have made of few ways of public awareness such as

advertising campaign, media relations, briefings and road shows,

education programmes and publication materials. A division of

advertising is made which includes the design of websites with four

languages. Bahasa Malaysia, English, Mandarin and Tamil are the four

languages that are available in the websites. This will help the

people who have difficulties to understand different languages other

than their mother tongue’s language.

Publications of PIDM books are made to show the effort in

contributing public awareness about PIDM in Malaysia. Handbooks on

Deposit Insurance System (DI) and, Takaful and Insurance Benefits

Protection System (TIPS), annual report, corporate plan and

brochures on DI, TIPS and info regs is printed to bring a wider and

remarkable awareness of the public on PIDM. For the most common

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advertisement is through newspaper which is very influencing as most

of us will read newspaper.

Apart from being professional, PIDM is creative too. They

publicise themselves through radio ads in few different language

including Bahasa Malaysia, English, Mandarin and Tamil. Duration for

the radio ads is only for about 30 seconds which is just nice. A

very long advertisement would not be interesting instead it will be

boring and so a 30 seconds advertisement will be worth it to PIDM.

Based on common knowledge, all of us will at least listen to the

radio or watch the television as part of our daily routine. PIDM

does not only advertise themselves through radio ads but at the same

time they are advertised through televisions too. These are the

fastest way to increase public awareness on what is Perbadanan

Insurans Deposit Malaysia (PIDM). Simultaneously, it is able to

encourage and convince the public that PIDM is the first choice of

deposit insurance company. Bear in mind that a Mandarin version and

Cantonese version of infomercial are provided too. It is a very

unique way to introduce themselves to the public.

Another effort made by PIDM to increase the public awareness is

by providing information strip and film lets about Deposit Insurance

and Takaful and Insurance Benefits Protection System. They value

more as education materials.

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Talking about education, PIDM is now starting up an education

programme. The aims are to promote financial awareness and literacy

especially on savings. To be more precise, giving more awareness to

teenagers and young adults of how important savings can be in future

time. Educating them is one of the main elements in achieving the

goals. These programs are held for students of secondary schools and

higher learning institutions. Operation has been made since 2010 to

200 schools and 50 higher learning institutions. In 2011, 250

schools, 50 higher learning institutions and 30 seminars on

financial management for teachers have been made by PIDM.

Last but not least, PIDM has also launched a project called

‘PIDM Money Smart Project’. These types of advertising are delivered

to the public through materials such as briefings, road shows,

online game, board game, leaflets and comic book. To get more

information about it, the public are most welcome to surf its

websites. With all of its meticulous tactics to advertise and

increase public awareness about PIDM, it is a certainty that in the

coming few years from now, PIDM will be a very skilled and

professional company that manages the best deposit insurance system

of all.

Conclusion

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