Insurance is highly regulated in the United States. The intent is to protect consumers against the unfair practices of insurance companies.
Some of the areas that are regulated include:
* Licening of insurers and agents
* Approval of rates
* Content of policy forms
* Contract interpretation and enforcement
* Sales practices and information disclosure
Some of these requirements are already practiced in Singapore. In other areas, there is a need (in my view) for the regulatiron to be tightened.
For example, our regulators should ensure that the wordings of the policy forms are clear, to avoid future disputes between the insurer and the policyholder. The terms should also be fair to the policyholder.
Apparently in Malaysia, Bank Negara places the responsibility of ensuring fair treatment to policyholders with respect to policy wording, sales illstration, sales promotion documents etc to the Appointed Actuary and the CEO.
ReplyDeleteThere is too little direct regulation by MAS. The insurers are left to self regulate.No insurers will shoot its own foot. If there is any they are meant for show.
ReplyDeleteMAS must make the management answerable for all misconducts by the staff and the insurance agents.
MAS must regulate the products to ensure that they are of genuine value to the consumers. They must be simple, low cost and give high return and protection.
MAS must license all the insurance agents and to keep a record of their misconduct for consumers to access for verification.
MAS must ban product pushing to prevent malpractices and the use of gifts to entice the consumers.
MAS must review the remuneration model currently used so that no transaction is induced or motivated by commission.
MAS must raise the entry requirement for licensing and all current insurance agents must retake an exam to satisfy the new requirement by certain time frame or else risk losing the license.
MAS must enforce that all approaches to cleints' concerns is by need based, ie. all advisers must conduct an analysis before recommending the products. To ensure that it is properly and really conducted MAS must conduct an audit to enforce it to prevent the companies from covering up.
The above are to make sure the sellers do not anyhow sell products or by unethical or dubious modus operandi to cheat the consumers, especailly the poor and the elderly.