Someone, posting anonymously, has attacked me a few times for my views on the treatment of orphaned money. He asked if there were orphaned money in NTUC Income during the time that I was the CEO.
During my time, we adopted a different approach. We distributed a high rate of reversionary bonus to each class of policy that could be supported by the actual long term investment yield of the fund. We kept a portion of the surplus to be paid as special bonus on the maturity or termination of the policy.
More importantly, we were able to distribute to the policyholders an attractive rate of return, which is now used by the new management in their advertisement. This attractive return was possible due to low expenses and a high payout to policyholders, i.e. not retained as orphaned money.
I became alarmed when NTUC Income decided to cut the reversionary bonus recently. Under the new structure, it is difficult for a policyholder to know if he or she is getting a fair payout on the maturity or termination of the policy. It now becomes important for an asset share should be calculated for each policy, to guide the final payout.
I decided to study the concept of asset share in more detail. I like the approach adopted in Malaysia. It requires an asset share to be calculated for each policy based on the actual experience of the fund. It credits the premiums paid and investment income earned and deducts the actual expenses and other charges. The regulator requires that the full asset share should be paid to the policyholder on the termination of the policy, after it has been in-force for a certain number of years.
This method is simple, transparent and fair. I hope that MAS will adopt this approach in Singapore.
The one who attacked you repeatedly for pointing out what can only be good for policyholders is either someone who was fired by you previously or someone from the new management. How else would someone be so persistent and interested in what happened decades ago and chose to ignore what is happening so blatantly now? During the time when I was collecting signatures for the petition against the cut in terminal bonuses I was scolded by some old men when they heard me mention your name. It seems there are quite some old men who cannot let go of the past and have an axe to grind. These old men are not interested in justice and doing what is right for society. Instead they are bitter old men who will bring their personal grudges to their graves.
ReplyDeleteMR TAN
ReplyDeleteThank you for speaking up and speaking the truth aloud. Only a few have brain. Even fewer has a heart. You have both. You are the true son of Singapore. ** From Cashew Nut **
I support the concept of asset share, I owned
ReplyDelete15 particating policy with NTUC INCOME.
Time and again they used Mr.Tan's past returns to make you feel good that it can be replicated by the new management.It is only to let you feel 'shiok' but the truth is it is a illusion .
ReplyDeleteI suggest that you have someone qualified to review your 15 policies to see if they were sold to you by deception or misrepresentation. If there was it gives you a chance to claim full refund from these policies. The longer you hold on to them more losses you will incur because you will only get at best 3% or lower return. It is saving only and no accumulation.
So review them early before it is too late
Dear Mr Tan,
ReplyDeletePlease continue with what you are doing and also the best of luck to your new consumer watchdog group,FiSCA. I'm pretty sure it won't be a paper tiger like CASE.
Mr Tan,
ReplyDeleteI have great interest in this and you have my support as I cannot trust the new NTUC management. My policies are buoght under your charge and I agree the returns had been better and fairer
Sometime I wonder what MAS is busying now? The moment they decided not to micro manage, they literally not regulating and to make things worst, they don't even reply to constructive feedbacks. TKL is trying to improve the system but MAS is just not up to it. Maybe they have to ask the chairman/deputy chairman permission to look into TKL suggestion. Maybe also they are waiting for permission on what else to do after the MAS report. As usual, waiting for permission is part of their scope while I see the most energetic initiative they have is to ask for bonus and pay rise.
ReplyDeleteI bought all my insurance policies about twenty years ago from NTUC Income because I have absolute trust in it. I know, at that time, that I will get back my fair share of gains and would be able to get any claims fairly. What I did not forsee was the installation of the new CEO whose actions and deeds does not match what is written on the vision and mission statement. Now my policies are caught between a rock and a hard place. Give up and incur losses due to the "orphan money" issue or continue and get frustrated each time I go and pay the premiums because I would be reminded that while we slog and pay and pay, the new management is having a good time conjuring up new ways to "do us in". The recent actions by the new management has also thrown a bad light on the NTUC movement, and added to the beliefs that the PAP government, which oversees the NTUC movement is no longer caring about its citizens, and is teaming up with foreigners, I noticed the large number of foreigners being hired to head the new management, to mistreat citizens.
ReplyDeleteWhy, is a mystery but how is all plain to see.
Say good bye to your policies with ntuc. These policies will the source of funding for the new management and agents for incentive trips and posh dining and wining.
ReplyDeleteDecide whether to cut losses now or continue to lose agonise. Your agents the same agents who have switched to the new management side and licking and sucking up to them.
Have your policies reviewed at FISCA to see whether you can spot any mis-selling and misrepresentation by your agents. This is your hope of recouping the losses.
Naother Dr Cai in the making?
ReplyDeleteNtuc is more interested to be #1. Where got time to think of you policyholders. Say one thing do another thing. Either they talk cock or advertise cock. The ceo is supposed to be a director for protecting policyholders' interest, remember the AGM? It is like having a wolf in charge of your chicken coop.Sure finish!!!!It was a big mistake.
ReplyDeletePolicyholders should wake up and throw away all your wholelife , limited and anticipated craps.Now you know why you are getting pooor protection and poor return..what happened to the orphaned money.,.Soon yours will be orphaned too.That is why the conpany used greedy agents to push those products to you.
NTUC agents either peddle you vivolife, revosave or growth koyok.None of them is good as a protection insurance or saving.
ReplyDeleteSome incompetent and unethical ones will ask you to invest your CPF special account in this risky single premium product. Where got conscience these agents? It is very obvious they are unscrupulous. They are more interested in your commission.
Anyone with this product using the specail account better report to FISCA and ask for help to sue the agents or report to MAS.
Pls do not post this in your blog.
ReplyDeleteA personal query for an umderstanding about claims that par whole-life policy is not the way to go...
I bought whole-life par policy in mid '80s.
Sum assured $50K.
Annual premium abt $1.1K
Total premiums paid is abt $26.4K
Now quoted cash value is $47K
This is compounding at 4.7%
Unless I am grossly out of whack ... the above looks good. Pls enlighten me on the wrong I have missed. Thank you Mr Tan.
It is not bad but if you factor in inflation the real return is only 1.7%, still not bad.
ReplyDeleteYou could get this return because Mr.TanKL was in charge. Try get this return under the new managemnt. For the same period you only get less than 3%. It is bad considering the long time frame. Most people will not keep it for so long like you. Many already would have terminated and that benefits the company like orphaned money. The company is happy . The agent is happy because they can sell you another whoellife.
What is wrong with wholelife ? You could afford that much with wholelife. Lucky nothing has happened to you.What if something were to happen do you think $50K could provide for your family.
Another flaw of WL, try keeping till your old age and you can say the 4.7% won't be 4.7%, maybe reduced to 3.5%. What I mean is the longer you hold your cash value is being depleted year after year by the cost of insurance. This is revenue for the company and they love you for it.
Now you are in a delimma , right? whether to surrender or to continue holding it, right?
This information the insurer and the agents don't want to tell you. They sneaked on you.This is only the tip of the iceberg.