Hong Kong is a prosperous entrepot, with goods being imported and re-exported frequently. In order to save time and cost, traders usually re-export the goods without checking them after they have been imported to Hong Kong.

Disputes arise when the buyer receives and finds that the goods are damaged. It is difficult to prove when, where and how the goods have been damaged, as nobody has checked the goods until they have arrived at the consignees's warehouse. Have they been damaged on their way to Hong Kong, or during the re-export journey?

How can you prevent these concealed damages and minimise the loss?

Firstly, we would advise you to arrange both import (import on FOB) and re-export (export on CIF) insurance with us, so as to minimise argument and make the situation easier to manage when damage happens.

Secondly, you should check the condition of the goods before re-export. This simple process protects you from damage by allowing you to file a claim earlier and also reserves your rights to claim against third parties.

There is always a time gap during re-export. Don't forget to check whether you need to extend policy cover to storage at carrier's warehouse or public go-down to fill this gap. 

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We frequently receive requests for marine insurance quotations, but often without enough information to advise on whether the quotation should be for CIF or CIP.

According to Incoterms 2000, CIF stands for Cost, Insurance and Freight (… named port of destination), which means that the seller delivers the goods to the port of shipment. CIP stands for Carriage and Insurance Paid To (… named place of destination), which means that the seller delivers the goods to the carrier nominated by him but the seller must, in addition, pay the cost of carriage necessary to bring the goods to the named destination.

The major difference to the seller of transporting goods under CIF or CIP is that under CIF, the seller only needs to take out marine insurance against the buyer's risk of loss of or damage to the goods during the sea or inland waterway journey. Under CIP, in addition to marine insurance, the seller also needs to take out cargo insurance to cover the risk of loss of or damage to the goods during transportation from the discharge port to the named destination.

If you are a seller, check carefully if they are transporting goods under CIF or CIP terms in order to ascertain what insurance cover they need. If you are a buyer, please check if your sellers have taken out insurance that covers your goods only to the port of shipment.

As insurance professionals, by carefully checking customers' trade terms, we can provide services over and above simply quoting for a marine policy. These value-added services can help us better understand our customers' trade practices and also help us guide them into taking out the marine cargo insurance that suits their needs best. More importantly, in the event of any claims, they will not be prejudiced by the insurer. 

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Learn more about EASY Claims and file your claims online anytime, anywhere. 

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With the ever-improving economic environment in China, the trade volume between China and other countries is increasing. Many of you will be aware that a window company in China may be involved in any commercial relationship involving foreign trade. What is the best way to facilitate the claim process for China trade?

When a foreign seller trades with a buyer in China, the seller needs to sell the goods to a window company first and then re-sell them to the buyer. When there is a loss of or damage to the goods, in order to be entitled to compensation from the insurance company, the buyer needs to provide evidence that shows that the insurable interest belongs to him/her, and, at the same time, proves the relationship between his/her company and the window company.

Therefore, buyers should keep proper documentation such as cargo invoices and contracts that declare the relationship between them and the window company in order to facilitate the claim process in case of claims. When claims occur, the window company only has to issue a letter of indemnity release, then the insurance company can process the claims immediately. 

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With medical costs getting more and more expensive in Hong Kong, customers are increasingly looking for a top-up medical plan as a supplement to their existing medical plan in order to get better protection. In the past two years, many top-up medical plans with deductibles have emerged in the market. How can a customer select a top-up medical plan most suitable for his/her needs?

Apart from choosing an insurer with a good reputation and sound financial strength, the most important thing should be how to choose a deductible for a top-up medical plan. Customers should choose a deductible amount that can be covered under their company/existing medical plan. A simple rule is to choose an amount slightly lower or close to the maximum Surgical Benefit amount of a Major Operation provided by their company/existing medical plan.

In addition, employees may also need to consider the following when choosing a top-up medical plan:

Are the benefits of the top-up medical plan high enough to ensure sufficient protection?
MSIG’s MediSure Plus provides coverage of up to HK$1,500,000 per year, enabling customers to have sufficient protection.

Does the top-up medical plan provide comprehensive cover or just basic cover for hospital benefits?
MSIG’s MediSure Plus provides comprehensive coverage including pre- and post-hospitalisation care of up to 90 days, full cover for chemotherapy, radiotherapy or renal dialysis at a hospital.

Is there any sub-limit on benefits restricting the protection?
MSIG’s MediSure Plus offers no sub-limit for major benefits and provides full cover for major hospitalisation expenses such as miscellaneous hospital charges, in-hospital specialists, surgeons*, anaesthetists* and operation theatre charges*.

Does the top-up medical plan provide payment guarantee for hospitalisation to ensure complete peace of mind?
MSIG’s MediSure Plus provides International Payment Guarantee. MSIG will arrange direct settlement with the hospital, enabling customers to enjoy extra peace of mind.

There will be more tips for choosing a medical top-up plan in the next issue, so stay tuned!

*The maximum limit of surgeon, anaesthetist and operation theatre charges for Excel Plan are according to the surgical schedule up to HK$320,000.

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CriticalCare 1.0
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We shared some tips on choosing a top-up medical plan in the last issue. In this issue, here are more useful tips to consider when looking to improve your medical insurance cover:

Can customers change the selected plan and deductible amount at renewal? Is there any age restriction on change of plan and deductible?
MSIG’s MediSure Plus enables customers to upgrade or downgrade the plan level at policy renewal. Upgrade of plan is subject to an underwriting review. Customers are required to re-declare their health condition for assessment. There is no age restriction on the change of plan and deductible. Customers may change their selected plan and deductible anytime they want at renewal.

Can a customer keep their plan when he/she retires or leaves the company?
Customers can still keep MSIG’s MediSure Plus when they retire or leave the company. In either event, they can remove the deductible option and resume full cover at renewal.

Is there any lifelong guaranteed renewal of the top-up medical plan?
MSIG’s MediSure Plus offers lifelong medical and hospitalisation cover with guaranteed renewal*.

Is there a range of deductible amounts to choose from?
MSIG’s MediSure Plus offers 5 annual aggregate deductible amount^ options for selection, ranging from HK$10,000 to HK$120,000. The higher the aggregate deductible amount a customer chooses, the higher the premium discount they could enjoy, up to a maximum of 65%.

As the age limit for enrolment in a medical insurance plan for most insurance companies is below age 60, it is advisable to take out a medical plan before retirement. In addition, as the chances of having “pre-existing conditions” which are normally excluded from a medical insurance policy may increase when customers get older, it is always more beneficial to take out medical insurance at a younger age when one’s health condition is better.

* Critical Illness Benefit will be in effect until the age of 65.

^ The annual aggregate deductible amount applies to core cover only. All other benefits remain unchanged.

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According to the Insurance Claims Complaints Bureau, the number of complaints regarding hospitalisation and medical insurance products has doubled from 60 cases in 2004 to 120 cases in 2005. In most cases, complaints arose out of the application of policy terms and policyholders not declaring their medical records when purchasing insurance. We all look for thorough medical insurance protection, but what in particular should we be paying attention to? What benefits should be included in a general medical insurance plan and how does one decide how much cover is right for their needs?

Medical insurance usually covers a policyholder’s medical expenses, which is further divided into outpatient services and hospital services (inpatient services). While outpatient service protection covers the consultation fee of general and specialist practitioners and prescribed medication expenses, hospital service protection (inpatient service protection) covers a policyholder’s expenses during hospitalisation, including room & board, charges for doctor’s visits and surgical fees. As instances of critical illness are on the rise, it is also recommended that one should consider purchasing additional benefits to protect against critical illnesses, such as cancer, kidney failure, stroke, heart attack etc. Unless specified in the policy, most medical insurance plans do not cover dental treatment and cosmetic surgery. Therefore, the policyholder should be certain of their requirements when purchasing a specific plan.

Although most insurance plans have maximum benefits payable for each protected item, the policyholder should decide on the sum insured based on their own medical needs. In order to select an adequate amount of sum insured, the policyholder should first consider the types of medical benefits they would require, such as outpatient, hospitalisation (inpatient) and critical illness protection. They should then also take into consideration the cost of the medical service that they prefer. For example, the medical expenses would be higher if a patient wants to undergo treatment in a private hospital. As the premium increases with a broader scope of protection, one should carefully select an affordable medical insurance plan. If a policyholder is part of a group medical cover provided by their employer, one could consult the insurance company to purchase an additional personal medical insurance for more comprehensive protection. In this case, some insurance companies now provide medical insurance plans with a “top-up” feature, which allows customers to supplement their existing coverage with a more economical premium. For example, MSIG’s MediSure Plus Top-Up Plan allows customers to choose an annual deductible on top of their current medical insurance coverage with an insurance premium discount.

Unless a pre-existing condition is disclosed and accepted by the insurance company, it will be excluded in most medical insurance plans; hence, policyholders must declare their medical record. One should also pay attention to waiting periods. This means that any medical expenses claimed during a certain period after the medical plan was activated would not be covered by the insurance. In short, it is recommended that policyholders read through the terms & conditions of their policy thoroughly.

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Scenario:
Mr. Wong is a mobile phone wholesaler who has an open cover policy with an insurance company described as “Transit Insurance”. One Friday evening, Mr. Wong instructed Warehouse H to receive and dispatch goods. However, the goods from the supplier arrived near day-end and, because they could not be dispatched to Mr. Wong's customers immediately, they were stored in Warehouse H over the weekend (public holidays). Unluckily, some of the goods were discovered stolen the following Monday.

Question:
Were the stolen goods covered in Mr. Wong's open cover policy?

Answer:
The answer is “Yes”. As Mr. Wong had added a written clause to the open cover policy, stating “ VOYAGES:… (2) Place A to Place B. Cover attaches from the time the Assured accepts delivery of the insured goods and continues during the ordinary course of transit and terminates upon transfer of title as per invoice or instructions...” the written clause would override the printed clause because it was specifically added and was agreed to by the insurance company.

Although it was argued that the goods were stolen in the warehouse, while the policy was intended only to cover losses in the course of transit, it was Mr. Wong's usual practice to instruct the supplier to deliver goods to Warehouse H for dispatch to Mr. Wong's customers within a short period of time.

Moreover, the storing of the goods over the weekend (public holidays), which was longer than normal, made no difference to the cover, since the delay was readily understandable in the view of the public holidays and did not change the essential nature of the arrangement. The goods had been delivered to Warehouse H for the purpose of their onward transportation in circumstances covered by the express Voyages clause of the transit cover.

You should remind your customers to check if they have any special or additional needs to be covered in an open cover policy. If yes, you could remind them to add a written clause to the policy to ensure better protection. In Mr. Wong's case, if he had not added a written clause, it would probably be the case that he could not enjoy the insurance company's cover. By understanding your customer's business practices better, you can provide more professional advice and forge a closer relationship with them!

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Insured person Chan Tai Man has a Hypertension problem. He applied for medical insurance cover and found that the following areas were excluded:

• Hypertension
• Diabetes
• Cardiovascular Disease
• Peripheral Vascular Disease
• Renal Disease
• Hypertensive Retinopathy

His cousin, who also suffers from Hypertension, is covered by insurance for most of the diseases mentioned above except his pre-existing Hypertension. Why are the two cases different?

Insurers assess risk according to the applicant's overall health condition. They will look into the detailed causes of Hypertension, any correlated diseases and the applicant's family's health history.

Chan Tai Man's blood pressure runs at a consistently high level of 150/85, and he requires Antihypertensive medication. He is a heavy smoker who suffers from Diabetes and Hypercholesterolemia. His parents have a history of Stroke and Heart Attack.

Although his cousin also needs to take Antihypertensive medication, his blood pressure is stabilised at the safer level of 140/80.

If an applicant has a Hypertension problem, the insurer needs to evaluate the overall risk factors of the following areas:

• Control of blood pressure
• Smoking habit
• Obesity
• Hypercholesterolemia
• Diabetes
• Proteinuria
• Age
• Family history of Cardiovascular Disease
• Diet and exercise habit
• Medical reports such as electrocardiograms and chest X-rays

Applicants are required to provide the following information:

• When was the applicant first diagnosed with Hypertension?
• Are there any specific causes of the applicant's Hypertension?
• What was the applicant's blood pressure before and after treatment?
• Is the applicant taking Antihypertensive medication?
• How well does the applicant control his/her blood pressure?

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Some customers might not understand the importance of declaring their health information when applying for medical insurance. Non-disclosure of health information may lead to rejection of claims. What follows is a case from the Complaints Panel:

Mr. Wong did not declare that he was a Hepatitis B Carrier when applying for medical insurance, so the insurance company accepted his application with a standard premium. 15 months later, he was hospitalised with an oesophageal carcinoma. However, his hospitalisation claim was declined by his insurance company as Mr. Wong did not disclose that he was a Hepatitis B Carrier.

Mr. Wong admitted that he was aware of being a Hepatitis B Carrier when applying for medical insurance. However he disagreed with the decision made by the insurance company as there was no evidence proving the relationship between an oesophageal carcinoma and Hepatitis B. In addition, Mr. Wong claimed that being a Hepatitis B Carrier is common in Hong Kong.

Although there was no direct relationship between his oesophageal carcinoma and Hepatitis B, the non-disclosure was a material fact which would have affected the underwriting decision of his insurer in offering a standard rate. Therefore, his insurance company declined Mr. Wong’s claim according to the terms and conditions of the policy.

Customers are always advised to disclose their health condition in full to their insurance company otherwise it may affect their future claims. If they are not sure what information should be included in their health declaration, they should seek advice from their insurance representatives or insurance company.

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With more and more companies and organisations around the world using electronic services, many Hong Kong government organisations and companies are developing their own electronic systems to keep pace with these global advancements.

As part of our goal of providing excellent customer services, MSIG launched an electronic cargo system (eCargo) through its existing GenLink platform. With eCargo, you can issue an online open cover cargo policy 24 hours a day, 7 days a week without back and forth negotiation and without involving your agent or broker directly. At the same time, a handy “policy copy” function is also available to simplify the issuance process of similar shipments. The time saved will let you generate even more business and revenue.

Simply call us or your agent/broker to learn more about this e-platform. We'll be very happy to arrange a presentation that will demonstrate how eCargo will help you generate even more income!

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