Tan Kin Lian's Blog: Lack of transparency and accountability

Wednesday, May 07, 2008

Lack of transparency and accountability

Hello Kin Lian,
I really do empathise your plight - as what your former staff said: I quote " that if you are still the CEO, you would probably singing the same tune"....

I do agree with you that the bonus cut is uncalled for. As a layman, every now and then, whenever thereis a 'cut' in bonus, citing economic down turn - as an excuse, and policy holders are the 'guinea pig" to get the 'cut'.

All this while, we have no one to champion our grievances ..... and have to stomach the bonus 'cut' in silence. I feel there is no "transparency and accountability" on this issue as in my opinion, most management staffs are refrain from making "unnecessary comments" on the said subject.

Now, I am extremely delighted that with you at our side, the 'reduction in bonus' is now taken to task. I do hope other insurance companies, before taking out the 'knife' to "butcher" the policy holders' policy bonus rate, will think twice now.

Keep up the good work and now, my perception of you is changed.

REPLY
Thank you. In this case, the cut in bonus is unnecessarry as the invesment yield in 2007 was very high.

2 comments:

Unknown said...: Hi, Mr Tan, I have signed the Protest Letter and will be sending to you soon. I've got one other signature and hope to get a few more from other policyholders the next few days.

This episode shows the high-handedness of the current NTUC Income management. It shows their total lack of regard for the figures they showed on their past Benefits Illustrations (BI).

Will they show the same disregard for their present and future BIs? Who can trust what they put in their BIs when they do not have to honour what they print on them just because the BIs are mere illustrations and do not form part of the policy contract? Maybe they would honour their own BIs but will the next management team honour them? Is there any continuity of their business principles?

This is a mockery of MAS's and LIA's stated wish to promote more transparency through more disclosures in the BIs. In these BIs, we see more and more figures which have only become more and more confusing to the insurance-buying consumer (who really understands reduction in yields, effects of deductions, etc, etc, etc and what they really mean?). And what is the real point of promoting more disclosures when NTUC Income do not have to honour what they print inside their past BIs.

I would like MAS and LIA to seriously comment on this unprecedented and dangerous initiative by the current NTUC Income management. If NTUC Income were to have their way, will this then encourage more such moves by other insurers?

To stretch the argument, what is there to prevent insurers from declaring 1% annual bonuses whilst promising 1000% special bonuses in future, and 10 years later, a new management team takes over, rules that the old management were over-reckless and cut the special bonuses to a "more realistic" 300% due to industry best practices (since every other insurer is also doing the same thing), in the name of financial prudence and protecting the life funds, whilst rewarding themselves with fat bonuses, expensive incentive trips, or extravagant advertising campaigns like repeated full-page ads of a CEO's declaration in major newspapers.; May 07, 2008 7:33 PM
Anonymous said...: Mr. Tan, when is the company selling low cost insurance and unit trust be in the market? Hope you can expedite it. Awareness of insurance has improved with your blog. Hope the company that is selling very competitive insurance will give the big boys a run for their money and improve the industry in the best interest of consumers.; May 07, 2008 7:57 PM