Logo of Phnom Penh Post newspaper Phnom Penh Post - Life insurer targets low-income workers

Life insurer targets low-income workers

Life insurer targets low-income workers

An obscure NGO is providing life insurance coverage to low-income individuals, mostly garment workers, offering a financial safety net for the families of its policyholders, but triggering the concern of insurance regulators who take issue to its unlicensed operations.

The TYGi Save Death Association launched operations in late 2015 and now counts 600 “members”, or policyholders, the majority of whom are garment workers between the age of 30 and 45, according to Nhim Samnang, the NGO’s general manager.

He said the association operates by pooling the funds of its members so that they “can help each other”.

Members pay as little as $4 per month and can chose a coverage period from three to 15 years. If the member dies within this period, their family will receive a payout – $1,500 in the case of a three-year policy with a $4 monthly premium. If not, the full amount is returned to the member, with interest.

Nearly a year into operation, the micro-insurance scheme remains untested. No members have died, and so no claims have been submitted, Samnang said.

The association was established by businessman Yun Sophea, the chairman of the Tycoon Global Investment (TYGi) Group, whose six subsidiaries include a private equity firm, rubber plantation, microfinance institutions and an unlicensed derivatives trading outfit.

On Thursday, TYGi Save Death Association announced that it had signed a memorandum of understanding with rural credit operator Khmer Development Organisation (KDO) aimed at assisting low-income individuals unable to afford TYGi life insurance. Under the agreement, KDO will extend credit to these individuals to be used toward their monthly policy payments.

Huy Vatharo, chairman of the Insurance Association of Cambodia (IAC), expressed concern about the NGO’s life insurance scheme, which he said was being operated without any oversight.

“It is risky for members if the association is conducting insurance activities without holding a licence,” he said yesterday.

“If they collect money from members and decide to run away someday, the members will lose.”

In Meatra, director of the Ministry of Economy and Finance’s insurance and pension department, said he had not received any information about TYGi Save Death Association, but insisted that it must be licensed in order to offer any insurance product.

“If [the association] is doing anything without having approval from the sector’s regulator, it is negatively affecting the industry,” he said, promising to investigate the issue.

Samnang conceded that TYGi Save Death Association did not have an insurance license, but said if any members had concerns about the safety of their investments, they could cancel their policies and receive a refund.

“If the members worry, they can submit to withdraw their money and then the association will return the money to them,” he said, “but they need to respect the criteria.”

He said that refunds would not be given until the insurance policy matures. In the case of a policy with three-year coverage, “they can get their money back, but only if they wait until the third year”.

MOST VIEWED

  • Serious flooding across country

    The Kampong Speu provincial Committee for Disaster Management on Wednesday issued an alert after non-stop heavy rain caused widespread flooding. In Koh Kong province, authorities are working with the disaster committee and the Cambodian Red Cross to assist those affected after more than 350 homes were

  • CNRP points to King in call for vote boycott

    Leaders of the former Cambodia National Rescue Party (CNRP) have taken a new tack in their call for a boycott of the national elections later this month. They are now claiming that the people should follow the King, who is expected to abide by tradition

  • Actress’s NGO takes heat for promoting the ruling party

    An actress’s NGO which participated in an election campaign event contrary to the Law on Association and Non-Governmental Organisations (Lango) has been slammed. Chorn Chanleakena, a celebrity and the president of the Association of Artists Volunteering to Help Society, allegedly led its members in

  • Troop moves ‘won’t worry people’

    Senior officials at the Ministry of Defence and National Police said on Tuesday that riot training provided to the country’s police forces were aimed at preventing unexpected demonstrations and strikes before and after the July 29 national elections. The troop mobilisation, they said, would not