At the AGM of NTUC Income held in May 2009, I raised a few questions on the cut in bonus and increase in premium rates on motor insurance. The answers provided by the management are shown in the attached document.
So you can see the bonus cut from your policies was used to plug up some gap(loss) in the life fund investment to maintain the investment mix(allocation) otherwise the equity component would have suffered a reduction in allocation.It is like raising more money from sales to buy more equities. Is this a correct way of rebalancing the life fund investment? Is it an excuse? Is it an investmen failure? In other words every time in a down turn more cash would have to be poured in to rebalance? How frequent is it in this volatile time? or is balancing only required recently and that was why the need to cut bonus? Another point, the risk may not have gone up for the life fund but definitely it has gone up for the policyholders.Also the fund value has been reduced due to loss.As far as policyholders are concerned their money(bonus) are under subject to uncertainty. Isn't this risk? Isn't risk has gone up? Anybody without tertiary knowledge of investment can conclude that risk has gone up for the policyholders.The risk of the life fund may not after a rebalancing as this is the objective of rebalancing but for the policyholders their money may be gone and it would have been theirs before the bonus cut. Someone is talking cock.
Answers 2.7 and 2.8 are conflicting. Guess that he was unsure and the answers were attempts to justify the bonus cut. Unfortunately they were not satisfactory.
Good work here. At least the figures are being scrutinized and debated. Besides Income, are the other insurers doing a GOOD job?? I have policies with Great Eastern and Prudential, but every year when I received their annual statements, I am not very pleased. This is because the returns are much worse than originally projected by their SALESMAN/SALES-GIRL and their quotation documents.
Insurance agents are con man and girls. You can take them to MAS. Remember to blow the whistle to MAS when you see something wrong. MAS is encourage you to do that.
After all this issue had been highlighted , why there are no action done by the authority. Please create more awareness to all the policy holder . So that people will know how insurance company is run. Do we want to see another one more case of mini bond issue then the authority will take action . This will be too late .
In the Madoff case that is highlighted now in the U.S., it appears that many have blown the whistle on his modus operandi but the SEC did not act on it. Anyone knows why the regulating body did not act on it? My guess is that the SEC cannot believe that Madoff was running a Ponzi scheme back then because of his position and reputation and his connections. It is not difficult for well connected people or organisations to have the benefit of the doubt from enforcing organisations, that is what prestige and reputation is all about. So smart people took time to build them up so they are given respectable treatment.
So you can see the bonus cut from your policies was used to plug up some gap(loss) in the life fund investment to maintain the investment mix(allocation) otherwise the equity component would have suffered a reduction in allocation.It is like raising more money from sales to buy more equities. Is this a correct way of rebalancing the life fund investment? Is it an excuse? Is it an investmen failure?
ReplyDeleteIn other words every time in a down turn more cash would have to be poured in to rebalance? How frequent is it in this volatile time? or is balancing only required recently and that was why the need to cut bonus?
Another point, the risk may not have gone up for the life fund but definitely it has gone up for the policyholders.Also the fund value has been reduced due to loss.As far as policyholders are concerned their money(bonus) are under subject to uncertainty. Isn't this risk? Isn't risk has gone up?
Anybody without tertiary knowledge of investment can conclude that risk has gone up for the policyholders.The risk of the life fund may not after a rebalancing as this is the objective of rebalancing but for the policyholders their money may be gone and it would have been theirs before the bonus cut.
Someone is talking cock.
Answers 2.7 and 2.8 are conflicting.
ReplyDeleteGuess that he was unsure and the answers were attempts to justify the bonus cut. Unfortunately they were not satisfactory.
Good work here. At least the figures are being scrutinized and debated.
ReplyDeleteBesides Income, are the other insurers doing a GOOD job?? I have policies with Great Eastern and Prudential, but every year when I received their annual statements, I am not very pleased. This is because the returns are much worse than originally projected by their SALESMAN/SALES-GIRL and their quotation documents.
Insurance agents are con man and girls. You can take them to MAS.
ReplyDeleteRemember to blow the whistle to MAS when you see something wrong.
MAS is encourage you to do that.
Then blow the whistle to who when you see something wrong with MAS?
ReplyDeleteAfter all this issue had been highlighted , why there are no action done by the authority. Please create more awareness to all the policy holder . So that people will know how insurance company is run. Do we want to see another one more case of mini bond issue then the authority will take action . This will be too late .
ReplyDeletereport ntuc to mas
ReplyDeleteIn the Madoff case that is highlighted now in the U.S., it appears that many have blown the whistle on his modus operandi but the SEC did not act on it. Anyone knows why the regulating body did not act on it? My guess is that the SEC cannot believe that Madoff was running a Ponzi scheme back then because of his position and reputation and his connections. It is not difficult for well connected people or organisations to have the benefit of the doubt from enforcing organisations, that is what prestige and reputation is all about. So smart people took time to build them up so they are given respectable treatment.
ReplyDelete