Agenda IGP Seminar Panel Presentation for Thailand. Country Panel Session Thailand. Company Profile. Social Security Fund (Regulatory Benefits)

Transcription

1 Country Panel Session Thailand Boston, MA USA September Ms. Valadda Rodsutthi Senior Assistant Vice President Agenda Company Profile Social Security Fund (Regulatory Benefits) Workmen s Compensation Fund (Regulatory Benefits) Provident Fund Group Insurance

2 Muang Thai Life Assurance Co., Ltd. Established: April 6, 1951 Headquarter: Bangkok, Thailand Shareholders: *Muang Thai Group Holding Co., Ltd % Ageas Insurance International N.V % (Previously Fortis) Others % IGP Network Partner Since: 1983 (*51% by Kasikorn Bank Pcl.) Our Products & Services Ordinary Life Insurance Salary Saving Life Insurance Industrial Life Insurance Group Life Insurance Personal Accident and Health Loan and Mortgage Insurance Sales of life insurance through multiple distribution channels Housing Loan and Hire Purchase Loan Services Commercial Loan Services Muang Thai Smile Hot Line 1766 ( Customer Service Center)

3 Our Rewards of Success ISO 9001:2008 Standard Accreditation Life Insurance Company with Outstanding Management Award granted by the Department of Insurance, Ministry of Commerce: 1st Winner in 2006, 2007, 2008 and 2009; 2nd Winner in 2004 and 2005; and 3rd Winner in 2003 Q-MARK granted by the Joint Committee among Board of Trade of Thailand, The Federation of Thai Industries, and The Thai Bankers Association Outstanding Business Ethics Award 2005 granted by The Thai Chamber of Commerce Superbrands Awards Superbrands International 2006 Asia Superbrands 2006 Superbrands Thailand Silver Award from Marketing Association of Thailand Gold Award Winner from Reader's Digest Trusted Brand Awards 2010 Regulatory Benefits I. Social Security Fund II. Workmen s s Compensation Fund

4 Social Security Fund The Social Security Scheme is operated according to the Social Security Act B.E (A.D.1990) and its Amendment B.E (A.D.1994) and B.E (A.D.1999) to cover non-occupational sickness, injury, disability, and death to the insured employees including maternity and child allowance. Compulsory to any company with minimum one employee. (Must Register with SSO within 30 days from the starting date.) Contributed by government, employees, and employers as percentage of wage rate. Social Security Fact Number of Enterprises: 406,242 Number of Insured persons: 9,055,518 Number of hospitals in SS scheme: State-Run Private Total Sub-contracted of hospital network ,283 Number of Utilization (Unit : Case) Y 2011 Sickness Invalidity Death Maternity 30,981, , ,376 Maternity Old Age Child Allowance Unemployment 291, ,217 1,256,114 98,142 Data as of April 2012 Source:

5 Social Security Contribution Rate *The contribution rate is subject to the minimum wage of 1,650 Baht and the maximum of 15,000 Baht. Social Security Benefits 1. Sickness or Injuries Benefits 2. Disability Benefits (or Invalidity Benefits) 3. Death Benefits 4. Maternity Benefit 5. Child Allowance Benefits 6. Old-Age Pension Benefits 7. Unemployment Benefits

6 SSB - 1. Sickness or Injury Benefits Eligibility: Minimum Contribution Period: 3 months within 15 months before the date receiving treatment Benefits: An insured shall be entitled to non-occupational injury or sickness compensation benefits as follows: Medical Treatment. I. Treatment at insured s registered hospital: (Free of charge for eligible medical services.) SSB - 1. Sickness or Injury Benefits (Cont.) II. Treatment at other hospitals : For Critical Sickness / Emergency Injury only; - Must notify insured registered hospital w/in 72 hours - Medical expenses prior notifying will be covered as follow; OPD or Outpatient = THB 1,000/visit and Max. 2 visits per year IPD or Hospitalization = Reimbursed as necessary at rate prescribed by SSO Compensation for loss of income: - Payable on 31 st day of continuous sick leave ( The first 30 days get full-pay by employer) - Pay 50% of receiving salary for - Not exceeding 90 days / disability - Not exceeding 180 days / year - Not exceeding 365 days for chronic illness

7 SSB - 2. Disability Benefits: Eligibility: - Contribution period not less than 3 months within 15 months before the date becoming a disable person. Cost of Medical Treatment: - At registered hospital or State Run Hospital Free of charges - At private hospital Outpatient - Actual expense max THB 2,000/month Inpatient - Actual expense max THB 4,000/month Rehabilitation at SSO registered institutes: - Maximum 40,000 baht Compensation for loss of income: - 50% of salary throughout lifetime SSB - 3. Death Benefits: Eligibility: - Contribution Period not less than 1 month within 6 months before death Funeral Allowance: - THB 40,000 paid to Funeral Undertaker Benefit to Beneficiary:

8 SSB - 4. Maternity Benefits: Eligibility: - Contribution Period not less than 7 months within 15 months before the date of confinement Hospital Expenses: - THB 13,000 / delivery at any hospital (limited 2 deliveries) - Advance payment and later apply birth certificate for reimbursement Compensation for loss of income: - 50% of average salary up to 90 days per delivery SSB - 5. Child Allowance Benefits Eligibility: - Under 6 years of age (limited for the first 2 children) - Minimum Contribution Period not less than 12 months within 36 months before the month of receiving benefits Child Allowance: - THB 400 / month / child

9 SSB - 6. Old Age Pension Benefits Eligibility: - 55 years of age and cessation of being an insured person - Contribution Period not less than 180 months Benefits: - Pension rate for 180 months contribution = 20% of last 60 months of average wage. - Plus 1.5% per every 12 months of contributions above 180 months SSB - 6. Old Age Lump sum Benefits Eligibility: 55 years of age, cessation of being an insured person, and upon becoming disabled, or upon death Contribution Period less than 180 months Benefits: Contribution Period: Less than 12 months More than 12 months Death within 60 months entitlement to old age of pension benefit Benefits: Equal to Amount of paid contribution for Old- Age benefit made by insured employee. Equal to Amount of paid contribution for Old- Age benefit made by employer & employee, plus investment interest. 10 times last month pension before death

10 SSB - 7. Unemployment Benefits Eligibility: - Termination not caused by performing duty dishonestly or committing criminal offence against employer - Unemployed not less than 8 days - Not entitled to old age benefits - Contribution Period not less than 6 months within 15 months before becoming unemployed Benefits: Voluntary resignation: Laid off: 30% of paid salary at max. 90 days within a calendar year 50% of paid salary at max. 180 days within a calendar year Workmen's Compensation Fund (WCF) Set up according to the Workmen's Compensation Act B.E.2537 (A.D.1994) to give prompt and equitable protection against occupational injury, disease, disability, or death. Employers are solely liable to pay contributions to the WCF annually. (All employers with one or more employees) Insured employees are eligible to receive compensation benefits consisting of medical services, monthly indemnity, rehabilitation and funeral grants

11 Contribution Contributions to the WCF are paid solely by employers based on annual wage but not exceeding THB 240,000 per employee per year The contribution rates, for the first four years, vary from % of wages depending on industry classification. On the fifth year, the employer's contributions will be reflected by experience rating factors based on the accident records of their business. Workmen s s Compensation Benefits 1. Work-Related Injuries or Sickness Benefits Medical Services up to 1) THB 45,000 (normal case) or, 2) THB 65,000 (Severe injury as categorized by WCF) or, 3) THB 300,000 (Major medical treatments as categorized by WCF), If any of the above is not sufficient, employer may compensate more as necessary up to THB 300,000 (as to be approved by WCF medical board) Compensation in the case of inability to work for over 3 consecutive days - 60% of monthly wage payable on the 1 st day of disability up to 1 year.

12 Workmen s s Compensation Benefits 2. Dismemberment Compensation (Loss of Organs) Monthly Cash Benefits (Income Replacement) - 60% of monthly wage (Max. 10 years) Rehabilitation of working ability after sustaining an accident - Vocational rehabilitation and medical services up to THB 20, Operation cost for rehabilitation up to THB 20,000. Workmen s s Compensation Benefits 3. Disability Resulted From Work Performance: Monthly compensation (Income Replacement) - 60% of the last monthly salary shall be payable each month for a period of 15 years, if the employee becomes completely and permanently disabled. 4. Death or Disappearance Compensation : - Cash Benefits (Pay to beneficiary) 60% of monthly wage for 8 years - Lump Sum Funeral Grant 100 times highest daily wages. (Minimum standard wage) - Disappearance (not less than 120 days and reasonably believes that the vehicle is damaged from an accident and the employee is dead)

13 WC Utilization History Type of WC Claims Year Death Disability Dismemberm ent Inability to work > 3 days Inability to work < 3 days Total case % case % case % case % case % case % , , , , , , , , , , , , , , , , , , , , Avg , , , , Source: Private Employee Benefits

14 Provident Fund Fact Growth : 5% from previous quarter Net Asset Value (NAV) : 656,240 mil. Increased 2.8% Employer : 11,793 increased 295 or 2.6% Employee : 2,337,949 Fund Size : 83.7% > 100 mil. 78.2% > 500 persons Source: Investment Management Supervision Department June 2555 Provident Funds The fund is a voluntary defined benefit and arranged upon agreements between employers and employees Contributions (Typical formula is 5% for both parties) : - Employee s contribution: 2-15% of the salary - Employer s contribution: 2-15% of the salary Retirement Age: - Retirement age is typically between 55 and 60. Management of the Fund: - Must be managed by a fund manager with business investment licenses. - Management fees range from 0.5% to 10% of the annual income of the fund, depending on the size of the fund. The average fee is 7%.

15 Contribution Rate Statistic Contribution (%) Employee s contribution (%) Employer s contribution (%) Total Source: Provident Fund Tax benefits Contributions Returns on Investment Benefit payouts Personal Income Tax (Employee): Up to 10,000 Baht /annum are tax deductible. Over 10,000 Baht /annum but not more than 15% of salary and less than 490,000 Baht are also tax exempted. Corporate Income Tax (Employer): Tax deductible as an expense up to 15% of wage. Investment benefits earned from the fund, whether in the form of interest, dividends, profits or capital gains, are tax exempted. The whole sum of benefit payouts is exempted from Tax for member who has; I. Retirement age of 55 years or older II. At least 5 years of membership. For member who does not maintain membership until retirement will not gain full tax benefits or not at all.

16 Group Insurance Benefits Group Life Insurance Benefits: Group Life Insurance Group Accidental Death & Dismemberment (AD&D) Group Total & Permanent Disability Insurance Personal Accident (under non-life product) Group Health Insurance Benefits: Hospitalization or In-Patient Benefit Out-Patient Benefit Major Medical Benefit Dental Care Maternity Laboratory Test Design of Benefit Plans Group Life Insurance Benefits: Coverage: - Multiple of Salary (12 to 36 times of monthly salary) - Flatted Amount (THB 50,000 to 1,000,000 ) Market Practice: - Related to monthly salary 15% - Flat amount 85% Plan Classification: - Level of position (2 4 plans) - Single plan - Service year (very few) Market Practice: - Level of Position 80% - Single Plan 18% - Service year 2%

17 Design of Benefit Plans Group Health Insurance Benefits: Hospitalization or In-Patient Benefit: - Daily Room & Board 800 3,500 (Max. 31 or 60 days / disability) - General Expenses 15,000 60,000 (Max. / disability) - Surgical Fees a. Subjected to schedule 15,000 60,000 b. Max. / disability 15,000 60,000 - Doctor Visits 500 1,200 - Emergency Accident Treatments 2,500 6,000 - Specialist Consultation Fees 2,000 5,000 Out-Patient Benefit: - Max. 30 visits per policy year 600 1,500 - Lump sum amount per policy year 10,000 30,000 Design of Benefit Plans Percentage of policy (employer) having each type of health insurance benefit; Benefits % of all policies Inpatient (Hospitalization) 57% Outpatient 46% Dental 10% Major Medical 7% Maternity 2% **providing coverage for dependents = 15% Based on all policies placed with MTL as of 31/06/2012

18 Problems on Social Security Benefit and Workmen s Compensation: Benefits Caps are very small Employee does not feel comfortable using it Limitation of service provider Quality of service is questionable Tax Benefit - Group Insurance Group Insurance All premium paid by Employer can be filed as company expense. Group Life Insurance and Health Insurance premium are tax-free. Non-Life Insurance premium is subject to special business tax (SBT) or value added tax (VAT) and Stamp Duty on top of premium. All benefits paid from the policy are tax-free.

19 Sample of Room & Board Charges Bangkok Area Data as of Feb 2012 Sample of Room & Board Charges Upcountry Data as of Feb 2012

20 Sample of Hospitalization Utilization Disease Code Incurred Cardiac arrest 1,260,689 Cerebral infarction 1,032,982 Malignant neoplasm of colon 669,638 Carcinoma in situ of breast (Breast Cancer) 491,634 Cardiovascular disease 485,565 Fracture of skull and facial bones 421,262 Fracture of shaft of tibia 388,851 Spondylolisthesis 417,685 Epidural haemorrhage 336,178 Cord compression 691,625 Thank you for your attention! Ms. Valadda Rodsutthi Senior Assistant Vice President Group Insurance Department Muang Thai Life Assurance Co., Ltd. T (66) (2) E valadda_r@muangthai.co.th