SM Advantage Card Official Answers Issues on the Insurance Program

This is a reprint with permission from Ms. Marou Sarne's blog:

I can't resist but reiterate my initial opinion of Mr. Maclang -- malabo s'yang kausap!!!!

ANSWERS OF MR. REY MACLANG, AVP FOR SM MARKETING, REGARDING THE CONTROVERSIAL SM ADVANTAGE CARD-PHILAM INSURANCE PROGRAM:

1. When did the insurance promo for SM Advantage Card holders begin?

The SM Advantage Personal Accident Insurance Program is NOT a promotion. It is an embedded value-added feature of SM Advantage which is granted to members once they reach a specific points balance in their card. The insurance benefit has been an integral part of SM Advantage since July 2006. This is over and above all the other benefits, perks, discounts and savings that SM Advantage management continuously develops for its members.

Recognizing the importance of insurance for every individual, SM Advantage, in partnership with Philam Insurance, created one of the most convenient and affordable programs in the market to ensure that its members can acquire basic financial protection against accidental death or permanent disability. With this modest motivation in mind, we continue to proudly extend this privilege to our members by providing them the following advantages:

· Extremely accessible and convenient insurance coverage simply by being an SM Advantage member.

· The opportunity to have an insurance coverage at a very low price, without any cash outlay. If the member would try to acquire an individual Personal Accident Insurance outside this program, it would cost approximately P500. With this specially-arranged program with Philam Insurance, our members have access to a substantial amount of insurance for only 20 points (equivalent to P20.00).

2. Were the customers informed beforehand that they will receive an accident insurance policy prior to the deduction of their 20 points in their rewards? How?

Yes, we, together with Philam Insurance have consistently informed our members about this privilege through flyers and full page advertisements in the most prominent daily broadsheets such as Philippine Daily Inquirer, Manila Bulletin and Philippine Star in compliance with the terms and conditions of the Loyalty Program. This advertising campaign actually started two weeks before the launch of the insurance program in 2006. Moreover, we continuously explore program enhancements and have lined up activities to raise the awareness of our members about this program, most recent of which are the SMS and e-mail blasts sent to members.

We have also informed our members through newspaper articles of actual claim cases where Philam Insurance paid out the insurance proceeds of more than P100,000 to the beneficiaries of insured SM Advantage members who were deducted a mere 20 points.

This is a genuine, and not to mention expensive effort on our part and that of our partner, Philam Insurance, to efficiently disseminate information and to ensure that all legitimate and admissible claims under the insurance program are paid to the rightful beneficiaries at all times.

3. Did the customers sign an agreement regarding this promotion prior to its implementation?

When members signed up for membership in the SM Advantage Loyalty program, they effectively agreed to its Terms and Conditions.

Section V of the Terms and Conditions of the SM Advantage Program states that:

1. The Terms and Conditions and Guidelines cannot be superseded or changed except by MCI. MCI shall use all reasonable endeavors to provide Members with accurate and timely information regarding the SM Advantage Program including any changes thereof; however, MCI and its Partners shall not be liable in any way for failure to do so.

2. MCI is not liable for any Award or Privilege not being available or being withdrawn for any reason whatsoever by any SM Advantage Partner.

3. MCI reserves the right at all times, without notice and in its sole discretion:

a. To make any changes whatsoever to these Terms and Conditions including the rules and guidelines in the Member’s Manual.

b. To withdraw, cancel, withhold, substitute, deny access to or use of in any way change any of the Awards and Privileges previously advertised or offered, to any Member, at any time, without prior notice, MCI will not be liable for any loss or damage suffered by the Member resulting from such withdrawal, cancellation, variation or change.

c. To terminate or materially alter the SM Advantage Program and/or revoke the membership of any Member and/or the right of any Member to use the Membership Card or to utilize any Award or Privilege.

4. If you’re an SM Advantage card holder, are you automatically enrolled to the insurance program?

Enrollment into the insurance program is done every 15^th of the month for qualified members. To qualify, a member must:

1. have a balance of at least 70 points at the time of enrollment.
2. be between 18 to 70 years old.

Upon enrollment, 20 points are debited from the member’s points balance as one-time payment for his/her P100,000 accident insurance coverage for one year.

5. How much premium does SM pay for each qualified card holder’s insurance policy in PhilAm?

We cannot divulge the amount of premium we pay for each insurance coverage. However, because the program involves group insurance coverage and uses the opt-out mechanics for enrollment, we were able to arrange for the members a significant premium discount from Philam Insurance. This is the benefit and the privilege that we give to our members – the provision of very inexpensive financial protection that would otherwise have cost more if our members were to buy it themselves.

6. Did SM follow due process regarding the promotion? Did they get permission from the concerned agencies like the Department of Trade and Industry and the Insurance Commission?

Since the insurance program is not a promotion, there is no need to secure approval from DTI. Also, as per Philam, group accident insurance programs do not necessarily require IC’s permission to launch. However, the terms and conditions of the policy issued by Philam were reviewed and approved by the Insurance Commission. We have chosen to partner with Philam Insurance because they are a highly reputable insurance company.

7. How does the card holder get her certification / insurance policy?

Since this is a group insurance coverage, Philam Insurance issued us a Group Master Policy to cover all qualified members of SM Advantage. There is no need to issue individual certificates. If an individual member wants proof of cover, an insurance certificate can be requested from Philam Insurance by calling the Philam hotline at 528-5202.

8. How does she / he claim from the insurance company?

Just like with any other personal insurance, the insured member or his/her beneficiary can call the Philam hotline and he/she will be guided on how to claim. Claim documents will of course be required.

9. Who determines the beneficiaries of the policy in case of accidental death?

The law specifies that the benefits shall go in full to the first group of the following:

· Spouse, if none

· Child/ren, if none

· Parents, if none

· Siblings, if none

· Administrator of your estate

10. Is this a group insurance or an individual insurance? Why weren’t the certificates issued / mailed to the card holders upon the deduction of their points?

Please refer to our answer to Question # 7

11. Why were the card holders informed of the program a few months before the expiration of the policy (and not upon the start of the coverage?)

As explained in our answer to question # 2, we have continuously advertised the benefits of the insurance program through various prominent broadsheets, using full page colored ads. In an effort to more effectively inform our members of the program, we distributed flyers and, more recently, we launched an SMS and e-mail information drive to all qualified members regardless of the inception date of their insurance coverage. We know that newspaper advertisements, flyers, SMS and e-mail messages cannot ensure that all our members are made aware of the benefits of the insurance program; therefore we have extended and continue to extend great efforts and expense in informing our members about this important program.

12. If the card holder met an accident before he was informed of the insurance coverage, and if the policy has expired before the card holder was informed that he was covered, can the card holder still claim from the company or reimburse his hospital / funeral expenses?

Whether the cardholder was informed of the insurance coverage before or after he/she met an accident is immaterial in determining the validity of a claim. What is important is that the accident or the loss occurred during the time that the member’s insurance cover was active. This means that a claim can still be made even after the coverage has lapsed so long as the accident or the loss happened within the coverage period.

13. If the customer doesn’t want the insurance coverage, is there an easier way to get out of the program, without going to the SM malls and signing an opt-out form?

Yes, there are many ways by which the member can opt out of the insurance program, all of which are indicated in our newspaper advertisements and can be explained by the Philam hotline:

• SMS – Register first by sending SMAC REG <16> <4> to 2213. Text: SMAC INSURANCE OUT to 2213 [P2.50/text]
• Philam Hotline – Call 528-5202
• Fax – Cut out Opt-out Form from the ad, fill out and fax to 833-8888.
• Customer Service Counters – Fill out Opt-out Form and submit to the Customer Service Counter of any SM Department Store branch.

In addition to these, members who do not wish to be included in the program can now opt out by sending an e-mail to help@sm-advantage.com, and soon via the SM Advantage website at www.sm-advantage.com. No matter how the member chooses to opt out of the program, his/her 20 points will be credited back to his/her SM Advantage account within five days.

We accept opt-outs at any time before or during the member’s 12-month coverage period.

14. How do they check if their points were returned?

Members can request for points balance inquiry at any cashier counter of SM Department Store, SM Supermarket, SM Hypermarket, or any of the other SM stores where the SM Advantage Card is accepted for points earning. Unfortunately, the cashier will only be able to give your total points balance, so you will need to know your balance before you opted out of the insurance program.

For a more accurate accounting of your points, you may log on and register at www.sm-advantage.com. There, you will be able to view your transaction log (points earning and redemption, including insurance reversal) as far back as January 2006.

15. Do SM Advantage Card points expire?

As stated in the Member’s Manual, all unredeemed points will be forfeited if the member fails to renew his/her card before its expiration date. However, as a concession to members who were unable to renew their card before expiration, we normally give a 90-day grace period before we forfeit their points. This means that if they renew their membership within three months after its expiration, their remaining points will still be transferred to their new card.