My doctor asked me about the work of FISCA. I said that there are a lot of challenges, due to the unfair treatment of consumers.
I quoted the example of a policyholder who paid 21 years of premiums under a whole life policy with some riders. At the end of 21 years, he just got back to the total premiums paid, i.e. break-even point. The total amount was $54,000. A similar policy taken with a good insurer would have paid $75,000 (or 39% more).
The doctor was surprised. Surely there must be some standard for the consumer to compare the payouts? Where did the difference in the maturity payout go to?
I said that most consumers are in the dark. They are not able to compare what the payouts would have been, if they had taken a similar policy from another insurer. The insurer that gave a poor return probably had higher expenses and kept a larger part of the surplus as surplus or orphaned money.
Many years ago, if a policyholder sends a complaint to MAS, the MAS officer would ask the insurance company for an explanation. The insurance company would have to justify the low payout and have to give the answer truthfully.
This practice has stopped in recent years, after the formation of FIDREC. The policyholders are now asked to send their complaint to FIDREC. Unfortunately, FIDREC does not have the same powers as MAS.
To ensure fair treatment of consumers, it is important that the concept of asset share for each individual policy, as practiced in Malaysia, must be adopted in Singapore. This will ensure that consumers get a fair payout and make the practice more transparent.
Tan Kin Lian
If asset share is adopted then lavish marketing and advertising will be affected. Incentive trips and extravagant spending on dinning and wining and wasteful promotion will have to stop because all this money comes from a pool of money not accounted and meant for the ceo to fool around .
ReplyDeleteDear Mr Tan,
ReplyDeleteMAS should invite you as their consultant to improve their regulations. They keep attracting foreigner talents, but ignored their own treasues. How pitiful it is!
All these current issues are unfortunately creating a mountain of unhappiness and anger amongst our citizens against the government. This will have a negative effect on them in the next election. I am sure they will win but the percentage will drop. I sincerely hope the government will address these regulatory flaws and win back the electorate confidence. Question - if there are so many recognised issues stated in this blog by many people on FIs,insurance companies etc.., why isnt the government/MAS setting things right.
ReplyDeleteI suppose over time, some of our decision makers (both public & private sectors) we have lost their bearings in trying to achieve its goals and objectives. It is still not too late to change and we must all have the will and commitment otherwise what's the point of achieving first world standard and losing our part of our conscience.
All these bad publicity about insurance really puts me off in insurance products. I think better to stick to Medisave or term insurance. Is term insurance safe too. My NTUC income shield plan requires me to inform them four days in advance before hospitalisation, as if I would have known when I will get sick and need hospitaisation in four days time. What about an emergency? Maybe i should switch to other plans which do not require this four day notification. It's absurd, isn't it.
ReplyDelete