The Straits Times reported that 20 insurance advisers left NTUC Income to join other insurance companies, due to unhappiness with our insurance business center.
This is true. But it does not give the complete picture.
Each year, an average of 40 insurance agents from other companies join NTUC Income. They find it easier to sell our products, which give better value to their customers. Although they earn a lower rate of commission, they are able to earn more through a higher volume of sales.
Some join as supervisors or salaried consultants on fixed salaries.
NTUC Income aims to provide a new channel for people to buy insurance. We want to educate consumers and allow them to buy insurance from our business centers.
We will continue to have insurance advisers, who sell insurance to customers through the traditional way, by visiting their home or workplace. They continue to offer good value products to our customers.
There will be two channels to serve the two different groups of customers.
Thursday, May 18, 2006
Get good leaders in government
At each general election, there is the risk that some of our experienced ministers may not get elected into Parliament. People worry that this may disrupt the smooth running of our country.
Is there a different way to "find" capable people to run the country?
The American system provides an interesting alternative.
The citizens elect their representatives into Congress, which is the equaivalent of our Parliament. Each district elect their own representative. They do not have a "group consitutency" system.
The citizens also elect their President and Vice President to run the country. The President cannot run the country on his own. He nominates capable people to be secretaries of the various departments. These secretaries perform roles that are similar to our ministers.
For example, their secretary of state is like our foreign affairs minister. The secretary of the treasury is like our finance minister.
The nominees have to be approved by Congress, which are the elected representatives of the people.
I think that Singapore can adopt this aspect of the American system. We do not need all ministers to be members of parliament at the same time. If necessary, we can appoint a minister from outside of Parliament, if they get the approval of a select committee of the Parliament.
Is there a different way to "find" capable people to run the country?
The American system provides an interesting alternative.
The citizens elect their representatives into Congress, which is the equaivalent of our Parliament. Each district elect their own representative. They do not have a "group consitutency" system.
The citizens also elect their President and Vice President to run the country. The President cannot run the country on his own. He nominates capable people to be secretaries of the various departments. These secretaries perform roles that are similar to our ministers.
For example, their secretary of state is like our foreign affairs minister. The secretary of the treasury is like our finance minister.
The nominees have to be approved by Congress, which are the elected representatives of the people.
I think that Singapore can adopt this aspect of the American system. We do not need all ministers to be members of parliament at the same time. If necessary, we can appoint a minister from outside of Parliament, if they get the approval of a select committee of the Parliament.
Wednesday, May 17, 2006
Insurance Business Center
NTUC Income now provides a new channel to service our customers.
At our new business centres, our salaried insurance consultants are on hand to assist you.
You get suitable advice on insurance and financial planning, without feeling obliged to buy the product. You enjoy a lower premium and a better return on the insurance and investment products from NTUC Income.
You can also get a modest incentive by buying through our business center.
Our business centers are conveniently located at Bras Basah Road and Tampines Point.
Call 6877-3366 for an appointment.
At our new business centres, our salaried insurance consultants are on hand to assist you.
You get suitable advice on insurance and financial planning, without feeling obliged to buy the product. You enjoy a lower premium and a better return on the insurance and investment products from NTUC Income.
You can also get a modest incentive by buying through our business center.
Our business centers are conveniently located at Bras Basah Road and Tampines Point.
Call 6877-3366 for an appointment.
More people now read my blog
My site meter said that 350 people visit my blog last Friday and 400 visit yesterday. Wow.
Previously, I received an average of 150 visitors daily.
If you like my blog, tell your friends to visit it.
Previously, I received an average of 150 visitors daily.
If you like my blog, tell your friends to visit it.
Auto-renewal of fixed deposit at poor interest rate
Dear Mr Tan,
My $50,000 FD was auto-renewed 1 month ago at 1.7%, although the same bank is offering about 3% for other customers.
Probably, after this similar incident was highlighted in your blog, the bank finally tele-invited me to renew my FD at a higher rate of 3%. But I think it is still not fair that the 3% will be effective only from the date when I made a personal request at the bank to renew it.
I trust the banks to auto renew my deposit at the best rates and yet got a lousy deal in return for my trust.
Hazel
My $50,000 FD was auto-renewed 1 month ago at 1.7%, although the same bank is offering about 3% for other customers.
Probably, after this similar incident was highlighted in your blog, the bank finally tele-invited me to renew my FD at a higher rate of 3%. But I think it is still not fair that the 3% will be effective only from the date when I made a personal request at the bank to renew it.
I trust the banks to auto renew my deposit at the best rates and yet got a lousy deal in return for my trust.
Hazel
Tuesday, May 16, 2006
Positive feedback on Insurance Business Center
Dear Mr Tan,
Having salaried insurance consultants who are not commission based at NTUC Income's Insurance Business Centre is a fantastic concept. It shows that NTUC Income understands the needs of their customers.
My expereince dealing directly with either financial consultants from banks or insurance agents has left me with a somewhat negative impression as many push products and services which may not be entirely suited for me. At the back of my mind I always question the sincereity of the agents as hitting sales targets and earning a commission will still be their priority.
I look forward to going to NTUC Income's Insurance Business Centre for a financial evaluation soon!
RT
Having salaried insurance consultants who are not commission based at NTUC Income's Insurance Business Centre is a fantastic concept. It shows that NTUC Income understands the needs of their customers.
My expereince dealing directly with either financial consultants from banks or insurance agents has left me with a somewhat negative impression as many push products and services which may not be entirely suited for me. At the back of my mind I always question the sincereity of the agents as hitting sales targets and earning a commission will still be their priority.
I look forward to going to NTUC Income's Insurance Business Centre for a financial evaluation soon!
RT
Sunday, May 14, 2006
Bank customer is unhappy with renewal of fixed deposit
FROM A BANK CUSTOMER
I wish to bring up a disgusting issue regarding the behaviour of my bank.
My fixed deposit of $50,000 with bank X matured recently. The bank auto renewed it at 1.88%.
When I found out, I was so angry that I decided to withdraw the money. This bank has been offering 3% for a new deposit. And yet, the quietly renewed my deposit at a lower rate.
I am angry on behalf of all the people out there, especially those the retirees who are not so well educated. They trust the banks to auto renew their deposit at the best rates. They get a lousy deal in return for their trust.
If they threaten to take out their money and go to another bank, they will get a higher interest rate.
Our banks seems to be playing games, trying their best to OUTWIT and take advantage of the poor, uninformed consumer with their fancy tricks.
I'd say this is blatant cheating by institutions that are supposed to be high on trust and credibility.
I wish to bring up a disgusting issue regarding the behaviour of my bank.
My fixed deposit of $50,000 with bank X matured recently. The bank auto renewed it at 1.88%.
When I found out, I was so angry that I decided to withdraw the money. This bank has been offering 3% for a new deposit. And yet, the quietly renewed my deposit at a lower rate.
I am angry on behalf of all the people out there, especially those the retirees who are not so well educated. They trust the banks to auto renew their deposit at the best rates. They get a lousy deal in return for their trust.
If they threaten to take out their money and go to another bank, they will get a higher interest rate.
Our banks seems to be playing games, trying their best to OUTWIT and take advantage of the poor, uninformed consumer with their fancy tricks.
I'd say this is blatant cheating by institutions that are supposed to be high on trust and credibility.
Make the right choice. Earn $146,000 more!
Many people are approached by their friend, who is an insurance agent, to buy a life insurance policy. They obliged. They have to pay a big premium for many years.
If they buy the wrong product, they will get a poor return. The difference can be a lot of money.
If you invest $300 a month over 30 years, the difference (between earning 2% and 6% per annum) can be as much as $146,000. Yes, you can earn $146,0000 more when you buy the right product!
Even if you buy the right product to earn 6% per annum, the difference (between buying from company A and company B) can be as much as $60,000. It depends on the charges that are taken from your investment.
Wow. That is a lot of money.
Take my advice. Attend our educational seminar. Spend 2 hours only and learn how to make the right choice. It can be worth $146,000 more to you!
You can also get advice from our salaried consultant at our Insurance Business Center.
Call 6877 3366.
If they buy the wrong product, they will get a poor return. The difference can be a lot of money.
If you invest $300 a month over 30 years, the difference (between earning 2% and 6% per annum) can be as much as $146,000. Yes, you can earn $146,0000 more when you buy the right product!
Even if you buy the right product to earn 6% per annum, the difference (between buying from company A and company B) can be as much as $60,000. It depends on the charges that are taken from your investment.
Wow. That is a lot of money.
Take my advice. Attend our educational seminar. Spend 2 hours only and learn how to make the right choice. It can be worth $146,000 more to you!
You can also get advice from our salaried consultant at our Insurance Business Center.
Call 6877 3366.
Better to invest in ILP or unit trust?
QUESTION FROM THE PUBLIC
1. According to Dr Money, he has grouped unit trust seperately from insurance (ie ILP). Please explain the difference.
Reply: An ILP is offered by an insurnce company. It combines insurance with investment. An insurance adviser sells the product.
A unit trust is operated by a fund manager and distributed by a bank or a financial adviser. Apart from the charge by the unit trust operator, the financial adviser usually add another layer of charge.
2. Does that mean that unit trust usually charges a higher sales fee as compared to an ILP. What about the returns? Which one tends to give higher returns?
Reply: Different unit trusts and ILPs have different charges. It is very difficult to generalise. Many of them (except for NTUC Income) aim to make much profit, so they give less to the investors.
3. If I were to invest in an ILP, say the ideal plan, is the insurance component compulsory? Can I opt for 100% into investment alone?
Reply: If you buy our ideal plan, it is not compulsory to pay for insurance. You can opt for 100% investment. You can buy insurance separately, if you wish. We offer low cost term insurance.
TO FIND OUT MORE.
I suggest that you attend my education talk. You can register for the "financial tips for the young" http://www.income.coop/seminar/
You can also see a salaried consultant by visiting our business center.
http://www.income.coop/businesscentre/
1. According to Dr Money, he has grouped unit trust seperately from insurance (ie ILP). Please explain the difference.
Reply: An ILP is offered by an insurnce company. It combines insurance with investment. An insurance adviser sells the product.
A unit trust is operated by a fund manager and distributed by a bank or a financial adviser. Apart from the charge by the unit trust operator, the financial adviser usually add another layer of charge.
2. Does that mean that unit trust usually charges a higher sales fee as compared to an ILP. What about the returns? Which one tends to give higher returns?
Reply: Different unit trusts and ILPs have different charges. It is very difficult to generalise. Many of them (except for NTUC Income) aim to make much profit, so they give less to the investors.
3. If I were to invest in an ILP, say the ideal plan, is the insurance component compulsory? Can I opt for 100% into investment alone?
Reply: If you buy our ideal plan, it is not compulsory to pay for insurance. You can opt for 100% investment. You can buy insurance separately, if you wish. We offer low cost term insurance.
TO FIND OUT MORE.
I suggest that you attend my education talk. You can register for the "financial tips for the young" http://www.income.coop/seminar/
You can also see a salaried consultant by visiting our business center.
http://www.income.coop/businesscentre/
Saturday, May 13, 2006
How to save for a child?
QUESTION:
I really enjoyed reading your blog. You never failed to give some of your advice and experience with your readers.
May I know if there are any investment or insurance products suitable for children?
School-going children receive pocket money from their parents. Parents usually save the money into the banks which give very little interest. Are there any suitable financial products which allow this money to grow?
MY REPLY
I suggest that you save in an Ideal plan as well, if the saving is at least $50 a month. The saving can be accumulated to meet the cost of tertiary education. I will ask my colleague to call you and explain how this works.
I really enjoyed reading your blog. You never failed to give some of your advice and experience with your readers.
May I know if there are any investment or insurance products suitable for children?
School-going children receive pocket money from their parents. Parents usually save the money into the banks which give very little interest. Are there any suitable financial products which allow this money to grow?
MY REPLY
I suggest that you save in an Ideal plan as well, if the saving is at least $50 a month. The saving can be accumulated to meet the cost of tertiary education. I will ask my colleague to call you and explain how this works.
Equity markets are "correcting"
The major equity markets (USA, Japan, Europe) have dropped by about 3% during the past week. It is described as a "correction".
This is healthy, and is to be expected. It is good to have a correction, after moving up strongly for the past 2 years.
I am getting ready to increase my investment. I will probably wait for 1 or 2 weeks before I decide. If the market falls by a further 3 to 5 percent, it will represent good value.
For my current investment, I will keep it fully invested, as a long term investment. I do not wish to get out, because I may miss the turn-around in the market.
This is healthy, and is to be expected. It is good to have a correction, after moving up strongly for the past 2 years.
I am getting ready to increase my investment. I will probably wait for 1 or 2 weeks before I decide. If the market falls by a further 3 to 5 percent, it will represent good value.
For my current investment, I will keep it fully invested, as a long term investment. I do not wish to get out, because I may miss the turn-around in the market.
Advice: Don't buy structured products
Summary of an article from Dr Money's website: www.askdrmoney.com
Structured investments, deposits and guaranteed funds are a popular investment, distributed mostly by banks.
Issuers came up with something like a customised gambling product. The product might take 20 well-known stocks, for example, and let people place bets on which three would appreciate the most over 5 years.
It is difficult to guess the outcome. The odds are structured in such a way to give you a big payout if you win. And it provides you a "guaranteed" minimum return. It looks like a good investment, with no risks and good upside potential.
But it has many negative features.
1. Distributors are mostly banks. Their standard fee is 3 per cent of the amount invested. This charge is deducted from the net asset value of your investment. If you sell your investment immediately after purchase, you would receive back 97 per cent of your investment. Ultimately, the sales commission reduces your yield.
2. Issuers are the architects who design the structured product. They invest your money, after the distributor sends it to them. It is NOT possible to know how much the issuer takes from returns. You can ask the issuer or the distributor but they won’t tell you. It could be, say a fixed 2 per cent per year when total returns are between 2 and 6 per cent.
3. The structured product is linked to return from the underlying investments. If the return is high, the issuers have found a way to give you only a part of the gain, and to keep the excess return for themselves. They cap your return.
You can never know if you are getting a fair return for your money. It depends on how the product is designed.
Structured investments, deposits and guaranteed funds are a popular investment, distributed mostly by banks.
Issuers came up with something like a customised gambling product. The product might take 20 well-known stocks, for example, and let people place bets on which three would appreciate the most over 5 years.
It is difficult to guess the outcome. The odds are structured in such a way to give you a big payout if you win. And it provides you a "guaranteed" minimum return. It looks like a good investment, with no risks and good upside potential.
But it has many negative features.
1. Distributors are mostly banks. Their standard fee is 3 per cent of the amount invested. This charge is deducted from the net asset value of your investment. If you sell your investment immediately after purchase, you would receive back 97 per cent of your investment. Ultimately, the sales commission reduces your yield.
2. Issuers are the architects who design the structured product. They invest your money, after the distributor sends it to them. It is NOT possible to know how much the issuer takes from returns. You can ask the issuer or the distributor but they won’t tell you. It could be, say a fixed 2 per cent per year when total returns are between 2 and 6 per cent.
3. The structured product is linked to return from the underlying investments. If the return is high, the issuers have found a way to give you only a part of the gain, and to keep the excess return for themselves. They cap your return.
You can never know if you are getting a fair return for your money. It depends on how the product is designed.
Friday, May 12, 2006
Insurance Business Center
FROM A CUSTOMER
Dear Mr Tan,
I applause the new initiative from NTUC Income to create the insurance business center.
While many insurance companies invest large portion of their revenue to re-invent their corporate branding, NTUC Income created this business model to benefit your policy-holders where affect them most ... pocket !
Moreover, this business model will guide insurance advisors to be more service orientated and not strictly committing to sales target. A potential customer can be assured that the recommendation by insurance advisors from Insurance Business Centres is genuinely suitable for them and, or their requirement(s).
I have no doubt that this business model will obviously take some time to materialize since this is a brand new concept that seem impossible previously. Clearly this is another resemblance of a budget terminal or budget airlines; but most importantly, does not reduce in it's coverage.
VF
Dear Mr Tan,
I applause the new initiative from NTUC Income to create the insurance business center.
While many insurance companies invest large portion of their revenue to re-invent their corporate branding, NTUC Income created this business model to benefit your policy-holders where affect them most ... pocket !
Moreover, this business model will guide insurance advisors to be more service orientated and not strictly committing to sales target. A potential customer can be assured that the recommendation by insurance advisors from Insurance Business Centres is genuinely suitable for them and, or their requirement(s).
I have no doubt that this business model will obviously take some time to materialize since this is a brand new concept that seem impossible previously. Clearly this is another resemblance of a budget terminal or budget airlines; but most importantly, does not reduce in it's coverage.
VF
Thursday, May 11, 2006
Be careful about product advertisements
Here is a product advertised by a bank: "Fixed payout of 5.5 %, 6 months after the inception date."
Here are the facts:
- Many customers think that this means 5.5% return for 6-month return, or 11 % per year. This is not correct.
- To make this payout, the fund dips into the its capital. The fund is giving back part of your own investment and calling it a "payout".
- The actual return is linked to products and events which are very difficult to forecast. In this case, "the fund is linked to 6 Asia-Pacific market indices" and their performance over a period of 4 years and 11 months. You do not know what you will get.
GET MORE INFORMATION ABOUT BANK PRODUCTS FROM:
http://www.askdrmoney.com
Here are the facts:
- Many customers think that this means 5.5% return for 6-month return, or 11 % per year. This is not correct.
- To make this payout, the fund dips into the its capital. The fund is giving back part of your own investment and calling it a "payout".
- The actual return is linked to products and events which are very difficult to forecast. In this case, "the fund is linked to 6 Asia-Pacific market indices" and their performance over a period of 4 years and 11 months. You do not know what you will get.
GET MORE INFORMATION ABOUT BANK PRODUCTS FROM:
http://www.askdrmoney.com
30,000 happy policyholders
30,700 policies will have their policies maturing in 2006. The total payout is $623 million. The average payout is $20,300 per policy.
If these policyholders had taken a similar policy from another insurer, they will receive 10% to 15% less than the payout from NTUC Income. Why? The other insurers pay more commission to their agents and give more profit to their shareholders (at the expense of the policyholders).
NTUC Income is able to give a better return to our policyholders because we keep our expenses low, and give more of the surplus to our policyholders (instead of shareholders).
Our recent comparision show that our payout is 10% to 15% more than similar policies taken through our competitors. The difference could be more, for the longer term policies.
It is better to insure with NTUC Income. You will benefit in the long term.
If these policyholders had taken a similar policy from another insurer, they will receive 10% to 15% less than the payout from NTUC Income. Why? The other insurers pay more commission to their agents and give more profit to their shareholders (at the expense of the policyholders).
NTUC Income is able to give a better return to our policyholders because we keep our expenses low, and give more of the surplus to our policyholders (instead of shareholders).
Our recent comparision show that our payout is 10% to 15% more than similar policies taken through our competitors. The difference could be more, for the longer term policies.
It is better to insure with NTUC Income. You will benefit in the long term.
Good return on money market fund
NTUC Income has a money market fund. It will be invested mainly in interbank deposits, which now yield 3.15% pa to 3.38% for maturity of up to 12 months. These deposits are readily available and liquid.
We deduct 0.25% from the money market fund to cover our expenses. This will give a net yield of about 3% for investors. It is very attractive.
As the money is invested with a bank, it is quite safe. Almost like placing a fixed deposit with a bank.
How do you invest in our money market fund? We are launching the Flexi-Cash policy, which is invested in this fund. Watch out for our advertisement in two weeks' time.
We deduct 0.25% from the money market fund to cover our expenses. This will give a net yield of about 3% for investors. It is very attractive.
As the money is invested with a bank, it is quite safe. Almost like placing a fixed deposit with a bank.
How do you invest in our money market fund? We are launching the Flexi-Cash policy, which is invested in this fund. Watch out for our advertisement in two weeks' time.
Poor return from a policy sold through a bank
A client bought a policy from another insurer sold through a bank. She pays a premium of $50 a month through GIRO. The return is guaranteed to be $10,360 on the maturity date at the end of 15 years.
Is this a good return?
No. The return is 1.85% per annum.
Many people are not well educated. The older folks are being talked into buying a policy that they do not know in details.
My advice. If you are approached to buy a policy through a bank, and you do not know much about it, please ask before you get committed.
Know what you buy.
Is this a good return?
No. The return is 1.85% per annum.
Many people are not well educated. The older folks are being talked into buying a policy that they do not know in details.
My advice. If you are approached to buy a policy through a bank, and you do not know much about it, please ask before you get committed.
Know what you buy.
Client invested another $300,000 in the Combined Fund
FROM AN INSURANCE ADVISER:
I just had the opportunity to come back with a $300,000 from a client who had invested on Growth Fund with us more than a year ago. He knows the potential of this fund. I updated him with a spreadsheet of his investments.
CEO Tan Kin Lian sent this message to my client:
"I have most of my personal savings in the Combined Fund (Growth). I think that it is good for the long term.
Another good fund is Global Equity. I believe, that over 20 years, this fund is likely to earn at least 6% to 8% per annum, and quite safe. It may go up and down, but the average should be within this range. The average for the past 10 and 20 years is closer to 8%."
When I met him last evening, he told me, market seems high now, but it's okay, it is for long term. How old is he? 56.
He said, put the $300,000 in Growth Fund. Wow....
I just had the opportunity to come back with a $300,000 from a client who had invested on Growth Fund with us more than a year ago. He knows the potential of this fund. I updated him with a spreadsheet of his investments.
CEO Tan Kin Lian sent this message to my client:
"I have most of my personal savings in the Combined Fund (Growth). I think that it is good for the long term.
Another good fund is Global Equity. I believe, that over 20 years, this fund is likely to earn at least 6% to 8% per annum, and quite safe. It may go up and down, but the average should be within this range. The average for the past 10 and 20 years is closer to 8%."
When I met him last evening, he told me, market seems high now, but it's okay, it is for long term. How old is he? 56.
He said, put the $300,000 in Growth Fund. Wow....
Wednesday, May 10, 2006
Policyholder got an attractive return
AN INSURANCE ADVISER SENT THIS MESSAGE TO ME
I am writing on behalf of my prospect whose NTUC policy is about to mature on 24th June 2006.
When she bought the policy 19 yrs ago, her son was 2 yrs old so based on him going to University at age 21, the NTUC adviser recommended her the 19 year endowment.
She has been quite happy with NTUC having paid quite good bonuses over the years, even during the SARS, Sept 911 & various other difficult periods.
However, recently she was very disappointed when she received your company's letter advising her of her maturity benefit.
Her disappointed was in the vast difference between her gross maturity benefit of $41,458 and the total projected maturity of $45,012. This represents a hefty 7.89% less than the projected $45,012.
Hence, she has expressed her extreme loss of confidence towards NTUC.
-------------
HERE IS MY REPLY.
The policyholder paid a monthly premium of $102.70 for 19 years. Total premium paid for 19 years is $23,416. The maturing benefit of $41,458 represents a yield of 5.8% per annum.
You can tell the policyholder that the return of 5.8% per annum is quite attractive.
Our payout is about 10% to 15% higher than the payout offered by other insurance companies under a similar plan.
I am writing on behalf of my prospect whose NTUC policy is about to mature on 24th June 2006.
When she bought the policy 19 yrs ago, her son was 2 yrs old so based on him going to University at age 21, the NTUC adviser recommended her the 19 year endowment.
She has been quite happy with NTUC having paid quite good bonuses over the years, even during the SARS, Sept 911 & various other difficult periods.
However, recently she was very disappointed when she received your company's letter advising her of her maturity benefit.
Her disappointed was in the vast difference between her gross maturity benefit of $41,458 and the total projected maturity of $45,012. This represents a hefty 7.89% less than the projected $45,012.
Hence, she has expressed her extreme loss of confidence towards NTUC.
-------------
HERE IS MY REPLY.
The policyholder paid a monthly premium of $102.70 for 19 years. Total premium paid for 19 years is $23,416. The maturing benefit of $41,458 represents a yield of 5.8% per annum.
You can tell the policyholder that the return of 5.8% per annum is quite attractive.
Our payout is about 10% to 15% higher than the payout offered by other insurance companies under a similar plan.
Comparison of premium rates - medical plans
Incomeshield, subject to category limits
Total premium for age 20 to 80
Plan Income Co-G Co-A Co-P
P 47334 NA NA NA
A 32790 36463 42652 42670
B 19648 23127 25650 26765
Total premium for age 40 to 80
Plan Income Co-G Co-A Co-P
P 44456 NA NA NA
A 30651 34209 40265 40320
B 18464 21747 25019 24249
Enhanced Incomeshield, ie "as charged"
Total premium for age 20 to 80
Plan Income Co-V
Preferred 56405 58283
Advantage 40559 44866
Basic 22945 30267
Total premium for age 40 to 80
Plan Income Co-V
Preferred 53141 54777
Advantage 38301 42410
Basic 21511 28508
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