The partner-agent model

Case study 8 – CULROC, Taiwan

In 1982, the Credit Union League was established and registered as a legal non-profit organization at the Ministry of the Interior. The League organizes, supervises, administers and monitors the activities of all credit unions in Taiwan serving 180,000 members. After a number of years of lobbying CULROC achieved concessions from the Taiwanese government that whilst not a licensed insurer it could provide its members with products from foreign insurers, who were licensed in their own countries. As from 1 January 2001, subsequent to an ICMIF workshop on formalising credit union insurance programs, a partnership between CULROC and NTUC Income from Singapore was agreed to insure the credit union members under the following schemes:

Loan protection insurance (LP). This term life scheme is mainly designed to "let the debt die with the debtor". In case of death or total disability of a member, the balance of his qualified outstanding loan will be covered by the policy, subject to policy limits which varies from CU to CU. Premium is paid by the individual Credit Union (CU). It is collected monthly by the league from the CUs and settled together with the claims in a monthly account to NTUC Income.

Life savings (LS). This term life insurance is designed to optimize the value of share deposits for members. The policy will pay an amount equivalent to the value of the deceased member's share. This is subject to a maximum policy limit which varies with the age of the member and duration of membership and from CU to CU. Premiums and claims are administered by the League and NTUC Income in the same way as under the LP programme.

Peace savings (PS). The concept of this policy is savings and term life cover. Consequently, it has a maturity value and gives death and disability coverage. The maturity period is five years. Unlike LP/LS, which automatically covers all members and is paid by the CU, this policy is subject to application and individual payment by the member.

Bond. This is a cover for the CUs, giving protection for fraud and dishonest acts of the management committee of the societies, damages arising from criminal acts and cash in transit. Coverage is dependent on size, assets and daily cash transactions of the CU.

This partnership has provided benefits to all parties, CULROC members have access to more products and additional coverage. CULROC receives a risk-free commission for administering and marketing the business, it has access to the technical expertise, financial and reinsurance capacity of NTUC INCOME, one of Singapore’s leading insurance companies and is an associate member of ICMIF. NTUC INCOME gained entry into the Taiwanese market without set up costs and licensing requirements. NTUC Income and CULROC are discussing several new products, particularly endowment insurance programmes to provide for the ongoing needs of credit union members.

Source: Aloysius Teo, General Manager, NTUC INCOME, Singapore