Tan Kin Lian's Blog: Bonus on participating policies

Friday, April 25, 2008

Bonus on participating policies

Dear Mr. Tan
I have several life insurance policies with X. They reported higher investment income for 2007. I hear that they will reduce their annual bonus on their policies and increase the maturity bonus. Is this fair to policyholders? If not, what action can the policyholder take?

REPLY
The life insurance company and its appointed actuary is required to act fairly in the distribution of the annual bonus. They have to follow the principles set out in their contract or in their company bye-laws. Recently, the Monetary Authority of Singapore has issued a guideline on the distribution of bonuses on participating policies.

In the situation that you have described, the company X has to give a convincing explanation on why they are reducing their annual bonus, in spite of an increase in investment income. If you are unhappy with the explanation, you can lodge a complaint with MAS or with FiDREC.

You can ask MAS to verify if Company X has met with their obligation under the MAS guidelines.

12 comments:

Anonymous said...: I heard rumours that this Company X is not AIA, GE, Prudential or Aviva :); April 25, 2008 10:55 PM
Anonymous said...: You can lodge your complaint with the below.
CASE
Complaint Hotline:64631811

Fidrec
63278878
It is cutting the annual bonus without policyholders' consent.
It is breaking the contract.Imagine what they would do next.Assuming we will wait. What if after waiting for 25 years they start to "point to the sky and to the earth" and give all sorts of excuses.
I don't think we should wait. Let's tell the new management don't mess with us.; April 25, 2008 11:56 PM
Anonymous said...: If your old policies have broken even
I suggest that you surrender if the company goes ahead with the cut.
Take it to court for breach of contract.; April 26, 2008 12:19 AM
Anonymous said...: Seriously, it's time someone took action, instead of just whining and complaining. Write to the papers and expose these people.

Singaporeans have longed been suppressed by the climate of fear. This need not be so if someone can just take the first step. Others will follow.

You can write in to MAS and let them know that Mr. Tan has referred you to write in to them and that he has given his strong support to your case. We must not go easy on wrong doers.

Let us learn from the 2006 general election. Do not be the 66.6% of silent suppressed majority. Make your voice heard.

Or else, you will hear lame excuses like: "What to do, it has happened."; April 26, 2008 12:27 AM
Anonymous said...: Millions were spent on sprucing the building, relocation , renovation and replacement. Millions were spent on posh parties, 5 star meeting place for agents, increased commission, marketing and promotion and full page advertisements, incentive trips and host of other expenses, like increased cost of doing business like high salary for senior and middle managers ( whether "eat waste rice" or not).
It is money and money and it has to come from somewhere . Where? somewhere , lah.; April 26, 2008 5:33 PM
Anonymous said...: Why hide under X company when we all know it is NTUC INCOME. It is out that they are cutting annual bonuses
of old policies.
The new plans are already with low annual bonuses, low return low protection but this is not our business.
We must take actions.; April 26, 2008 6:35 PM
Anonymous said...: Any lawyers here who are willing to take up this case against NTUC Income on a nominal charge and who is confident of winning can let me know. I am willing to engage any lawyer on a willing basis for mutual benefit. Just drop a note here and I will contact you.; April 26, 2008 11:33 PM
Anonymous said...: Ntuc should not take what is rightfully belonging to policyholders. Many policyholders have been loyal and faithfully paying the premium and now it is taking away the bonus. During Mr. Tan's time, ntuc products could sell well because they were giving good values . This is cooperative value. 98% distributed to policyholders. We bought becuase of this.
What happened now? What social enterprise? Do we have new shareholders that we need to cut our bonus to pay them first.?
Are they, the salaries of the new senior managers that we need to pay very high salaries to hire them? They look like our new shareholders now. They have the first priority.; April 27, 2008 10:43 AM
Anonymous said...: Does MAS really can help us regarding this issue because i had several life insurance police in NTUC. Anyone had already highlight this case to MAS please let me know the outcome.; April 27, 2008 2:34 PM
Anonymous said...: It seems it is a new company with an old name. Then it should not mislead consumers that it is a still cooperative. It is a social enterprise but not a cooperative , to cut your annual bonus and give it to charity? Is that what the company is doing?; April 27, 2008 3:34 PM
hongjun said...: And they have just redesigned their NTUC logo. NTUC is now really a changed cooperative. Or is it still a cooperative?

hongjun; April 28, 2008 11:54 PM
Anonymous said...: I don't see any significant in changing the NTUC logo, unless it is now own by foreign investor, like Robinsons. Every one is tightening their belts, to cut costs, and to reduce wastage. This is improper and insensitive move by NTUC. I have always regard highly what NTUC does for the country citizens. Now, I truly have my reservations.; April 29, 2008 6:16 PM