The Life Insurance Association of Malaysia (Liam) today said it may take legal action against the Malaysian Trades Union Congress (MTUC) for accusing them of sponsoring three Employees Provident Fund (EPF) officials for an overseas trip.

Liam president L Meyyappan said the accusation made by MTUC secretary-general G Rajasekaran on June 11 was "very serious as his statement is defamatory to the credibility and image of Liam".

"We are not happy with his clarification and are therefore seeking legal advice," said Meyyappan.

Liam is a trade association recognised under the Insurance Act 1996 and its member companies include the 10 companies involved in the controversial EPF annuity scheme. MTUC claimed that the trip was to show the EPF officers how the scheme was handled in several European countries.

MTUC clarified today that it is taking the EPF to task and not Liam. "We have no quarrels with Liam and are not making allegations against the insurance association," said Rajasekaran in a statement.

"We heard about the three officials from an EPF source and all we said that if they were involved then they would be biased and the EPF should take note of this," he added.

Picket

The controversial annuity scheme was introduced in July last year as an optional pension scheme and has received much criticisms from MTUC. A study by the Consumers Association of Penang (CAP) found the scheme to be more beneficial to insurance companies than to the contributors.

The congress had planned a picket on May 12 to show their concern over this and other matters to the EPF. The picket was later deferred when Prime Minister Dr Mahathir Mohamad intervened and said that EPF's policies would be investigated.

Yesterday, Bernama reported that EPF chairperson Abdul Halim Ali as saying that the Fund would sue MTUC for alleging that three of its officials had gone on an overseas trip paid by the insurance association.

"We have the right to take legal action against them (MTUC) because their allegations are serious and damage the reputation and credibility of the EPF," said Abdul Halim at a press conference.

Detailed study

Meyyappan said he hoped MTUC officials or members of the press could verify future statements relating to the association and its members before they are published to avoid any embarrassment to the parties concerned.

"We have sufficient expertise and capability within the life insurance industry and actuarial consulting firms in Malaysia to study how an annuity scheme can be developed, bearing in mind that an annuity plan is a life insurance product," he said.

"The annuity scheme was introduced after a detailed study and consultation involving the association, EPF, Bank Negara and various government sectors was done some four years ago," he added.