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Social Security Organization (SOCSO)

The Social Security Organization is an organization set up to administer, enforce and


implement the Employees' Social Security Act, 1969 and the Employees' Social Security
(General) Regulations 1971.
The Social Security Organization provides social security protection by social insurance
including medical and cash benefits, provision of artificial aids and rehabilitation to
employees to reduce the sufferings and to provide financial guarantees and protection to the
family.
SOCSO is the abbreviation for Social Security Organization. It is commonly known in the
Malay term as Pertubuhan Keselamatan Sosial (PERKESO).
Employer and Employee Eligibility
A) Employer
i.

Employers are categorized into two:


Principal employer is an employer who directly employs an employee under a contract of
service or apprenticeship. All matters relating to services and payment of wages are handled
by them too.
Immediate employer is an employer who employs an employee by or through him to
perform work under the supervision of a principal employer. This includes a person who has
a contract of service with an employee and temporarily lends or lease the service of that
employee to a principal employer.

ii.

Employer responsibility
Principal and immediate employers who employ one or more employees are responsible to
register and pay the contributions to SOCSO. The principal employers are also accountable to
ensure the registration and payment of contributions for all employees employed by the
immediate employer. Failure to do so, and in the absence of the Immediate employer,
Principal employers will be deemed liable under the Act.

B) Employees
i.

Employees who are eligible for coverage and protection under the Act are:

Monthly wages of RM3000 or less

An employee employed under a contract of service or apprenticeship and earning a monthly


wages of RM3000 and below must compulsorily register and contribute to SOCSO regardless
of the employment status whether it is permanent, temporary or casual in nature.

Monthly wages exceeding RM3,000 with Option Notice

Employee receiving a monthly wages of more than RM3,000 and is not eligible under the
Act, however he can still be covered upon mutual agreement between employer and the
employee by submitting a notice in the specified form, together with Form 2 (refer to
Appendix).

'Once-In-Always-In' principles

Pursuant with the Once-In-Always-In principle, employees who have already contributed
and whose monthly wages exceed RM3000 thereafter, are required to continue contributing.
ii.

Employee Who Are Not Eligible Under The Act Are:


Earning more than RM3000 per month
Spouse of a Principal or Immediate employer
Any person whose employment is of casual nature and who is employed otherwise than for
the purposes of the employer's industry
Employees who are employed for household related services in a private residence or an
individual capacity, and not commercially or business based
A tributer, that is, a person who is permitted to win minerals or produce of any kind from or
on the land of another and who, in consideration of such permission, gives a proportion of
the minerals or produce so won to that other person or pays to him the value of such
proportions
Any member of Malaysian Armed Forces

Any Police Officer


A person who has been detained in any prison, Henry Gurney School, approved school,
detention camp, mental hospital, or leper settlement.
Contributions
SOCSO provides coverage to eligible employees through 2 schemes according to the rates as
stipulated by the Act. The rates are based on the total sum of the monthly wages received by
an employee. Contribution begins on the first month when the employee commences
employment.

Employment Injury and Invalidity Schemes

Employment Injury Scheme

These schemes are classified into 2 categories:


a. First Category (Employment Injury Insurance Scheme and Invalidity Pension Scheme)

The contribution payment is made by both the employer and employee.

All employees who have not attained 60 years of age are required to contribute under
the first category, except those who have attained 55 years of age and have made no
prior contributions before they reach 55 years.

The rates of contribution under this category comprise of 1.75% employers share and
0.5% employees monthly wages.

b. Second Category (Employment Injury Scheme)

The contribution is paid by the employer only. An employee who is not eligible for
coverage under the Invalidity Pension Scheme is protected under this category.

For employees 60 years old and above and still working

For employees above 55 years old when he first register and contribute to SOCSO

Insured Person receiving Invalidity Pension and still working and receiving less than
1/3 of the average monthly wages before the invalidity.

Under this Category, the contribution is paid by the employer for the Employment
Injury Scheme.

The rate of contribution under this category is only 1.25% of the employees monthly
wages solely borne by the employer.

These schemes provide the benefits of invalidity pension, invalidity grant, survivors pension,
rehabilitation, funeral benefit, constant attendance allowance and educational loan.
Payment of Contribution
Contributions can be paid through 3 methods:
1) Payment through collection agents
2) Payment through internet banking
3) Payment at SOCSO offices

Kurnia Insurans (Malaysia) Berhad


AmGeneral Insurance Berhad (AmGeneral Insurance) is founded on a combined business of
two former entities, AmG Insurance Berhad (AmG) and Kurnia Insurans (Malaysia)
Berhad (KIMB) with the acquisition of KIMB by AmBank Group and Insurance Australia
Group International Pty Ltd (IAG) in September 2012.
With our strengthened market position, AmGeneral Insurance stands as a pillar of the
industry, representing stability and strength with exceptional product offering, distribution
and customer service. As one of Malaysias largest motor and leading general insurance
company in the market, AmGeneral underwrites RM1.7 Billion Gross Written Premium
Written Premium for Financial Year 2013/2014 under its two well known, trusted brands
AmAssurance and Kurnia Insurans which are the face of the company to its agents,
customers and the general public.
Together, AmAssurance and Kurnia insure around one in every five cars in Malaysia (about
17% of market share in Motor) and enjoy 9% market share for share for general insurance by
gross written premium. With over 4 million customers, the company generates business from
a comprehensive range of general insurance solutions distributed through a network of 32
AmAssurance and Kurnia branches, servicing 7,000 agents and dealers, as well as through
AmBanks branches nationwide.
The Dual Brand
Their unique brand architecture lies within the strength of two significant brands in the
industry. Together, AmAssurance and Kurnia complement each other to engrave a history of
success, quality and service to their customers. While both AmAssurance and Kurnia retain
individual brand identities, the power of both brands and identity offers their customers a
winning combination by bringing different assets and benefits to the table. Both brands are
committed in growing commercial, focusing on their customers while inculcating personal
lines and in delivering the best in product design as well as quality, service and affordability.

Foreign Workers Compensation Scheme Insurance Policy Details


1. Introduction
Under Section 26(2) of the Amended Workmens Compensation Act 1952, it is mandatory for
every employer to insure all foreign workers employed by him under an approved insurance
scheme in respect of any liability that he may incur under the said Act.
Any employer who fails to insure the foreign workers under the said scheme shall be guilty of
an offence and shall be liable, on conviction, to a fine not exceeding RM20000.00 or to
imprisonment for a term not exceeding 2 years or both.
Kurnia Insurans has been appointed by the Ministry of Human Resources as one of the
insurers to provide coverage for employment accidents to foreign workers. Employers may
therefore insure all their foreign workers under the Insurance Scheme with Kurnia Insurans to
fulfil the requirements of the Act.
2. Scope of Cover and Benefits
Section 1: Workmens Compensation
This section covers the Insureds foreign worker against personal injury by accident or
disease arising out of or in the course of employment with the Insured.

Scope of cover
i) Accidental death due to employment injury

ii) Permanent Total Disablement


iii) Permanent Partial Disablement
iv) Temporary Total / Partial Disablement
v) Hospitalisation and Medical Expenses
vi) Occupational Disease

Benefits
60 months earnings or RM18000 whichever is
lower.
Additional payment of RM7,000 in event of death
arising out of and in the course of employment
60 months earnings or RM23000 whichever is
lower
A sum of money based on the capital sum of
RM23000 calculated in accordance with the First
Schedule of the Workmens Compensation Act.
A sum of money calculated in accordance with
Section 8(e) of the Workmens Compensation Act
Pays in accordance with the provisions of the
Workmens Compensation Act subject to maximum
RM750
According to the Second Schedule of the Act.

Note: Compensation shall not be payable for first 4 days of disablement unless the disablement lasts
for a period of at least 14 days.

Section 2: Repatriation Expenses


This section will indemnify the Insured for the actual repatriation expenses incurred or
RM4800.00 whichever is the lesser, in the event the insured worker dies or suffers permanent
total disablement.
Section 3: Personal Accident Insurance (Off-Work Hours)
This section will pay to the Insured person or his legal representative for personal injury
sustained in an accident, which occurs outside the working hours.

i)

Accidental Death (occurring


within 12 months of the accident)

Compensation sum of RM23,000

ii)

Permanent Total Disablement


(occurring within 12 months of
the accident)

Maximum compensation sum of RM23,000

iii)

Permanent Partial Disablement

Based on RM23,000 calculated in accordance with


the First Schedule of the Workmens Compensation
Act

iv)

Temporary Disablement

A sum of money calculated in accordance with


Section8(e) of the Workmens Compensation Act

v)

Medical Expenses

Pays in accordance to the provisions of the


Workmens Compensation Act subject to maximum
RM750.

3. Premium
The minimum annual premium is RM 76.32 (RM 71.02 + SPPA service fee RM5.30) per
foreign worker excluding stamp duty (Premiums stated are inclusive of 6% GST).
SPPA service fee is a fee charged for electronic link-up service for Skim Pampasan Pekerja
Asing (SPPA) / Foreign Workers Compensation Scheme (FWCS). Insurer will act as
collection agent on behalf of Labour Department and shall not be responsible for all matters
arising out of the service for which the fee is levied.

4. Fees and Charges


Type

Amount

Goods & Services Tax (GST)

6% of the premium

Stamp duty

RM10.00

Agent commission where there is an


intermediary involved

10% of the premium

Goods & Services Tax (GST) will be imposed on the applicable portion of the premiums due
and payable upon GST implementation and where GST is applicable.
5. Importance of Products Disclosure (Terms and Conditions)
i.

STATEMENT PURSUANT TO FINANCIAL SERVICES ACT 2013, Section 129,


Schedule 9, Para 5: It is the duty of the customer to take reasonable care not to make a
misrepresentation to the licensed insurer when answering any question which the
insurer may request that are relevant to the decision of the insurer whether to accept
the risk or not and the rates and terms to be applied

ii.

Customer must ensure that the particulars of their foreign workers are fully completed
and correct.

iii.

Customer policy is subject to premium warranty the insurance premium must be


paid and received by AmGeneral/authorized agent within 60 days from policy
inception date. If this condition is not complied with this policy is automatically
cancelled and AmGeneral shall be entitled to the pro-rata premium on the period they
have been on risk.

6. Major Exclusions
This policy does not cover certain losses, such as:
Common law liability.
War, terrorism and civil war.
Unlawful act, suicide and intentional self-injury.
Flying or travelling in an aircraft unless as a fare-paying passenger in a licensed
commercial aircraft on a scheduled route.
Influence of alcohol or of drugs not prescribed by a registered medical practitioner.
Dangerous sport activities such as mountaineering, diving, motor-racing, etc.

However, this list is non-exhaustive. Employees can refer to the policy contract for the full
list of exclusions under this policy.
Workmen Compensation Scheme Insurance Policy Detail
1. Introduction
This policy covers an employer in respect of his statutory liability under the Workmens
Compensation Act as well as at Common Law to his employees who are not covered by the
Social Security Organisation (SOCSO) as provided for under the Employees Social Security
Act 1969.

Employer could be held liable due to:


personal negligence
failure to provide a safe place and a safe system of work
failure to exercise reasonable care in recruitment of competent staff
failure to provide proper machinery and maintain them in good working order
2. Scope of Cover and Benefits
The policy indemnifies the Insured against all sums for which the Insured shall be liable to
pay compensation to any employee for personal injury sustained by accident or disease
arising out of and in the course of his employment, under:
i.

The Workmen Compensation Act together with any other amendment in the schedule of
the policy:
Workmen's Compensation Ordinance 1952 (Federation of Malaya)
Workmen's Compensation (Amendment) Ordinance 1956 (Federation of Malaya)
The Workmen's Compensation (Amendment) Act 1976
Modification of Laws (Workmen's Compensation) (Extension and Modification) Order,
1981
OR AT

ii. Common Law

However, the duration of cover is one year and Insured need to renew the policy annually.
This jurisdiction policy is subject to Malaysian Jurisdiction only.
3. Premium
The premium chargeable depends on the number of workmen / nature of occupation of the
employees insured and their estimated annual wages / salaries.
The premium charges are varies depending on various factors, the following are the main
criteria on determine the premium
RM ________________

Common Law Limit

Estimated Annual Payroll/Wages

: RM __________________

Rate Applicable

Estimated Premium Payable

: RM __________________

_________% on Estimated Annual Payroll/Wages

4. Fees and Charges


Type

Amount

Goods & Services Tax (GST)

6% of the premium (if applicable)

Stamp duty

RM10.00

Agent commission where there is an


intermediary involved

25% of the premium

Goods & Services Tax (GST) will be imposed on the applicable portion of the premiums due
and payable upon GST implementation and where GST is applicable.
5. Importance of Products Disclosure (Terms and Conditions)
STATEMENT PURSUANT TO FINANCIAL SERVICES ACT 2013, Section 129, Schedule
9, Paragraph 5:
It is the duty of the customer to take reasonable care not to make a misrepresentation to the
licensed insurer when answering any question which the insurer may request that are relevant
to the decision of the insurer whether to accept the risk or not and the rates and terms to be
applied.
Change in Risk

Customer must inform the insurer or their agent in writing on any material changes during the
policy period so that the necessary amendments are endorsed into their policy.