In some countries, e.g. Australia, it is mandatory for health insurance companies to provide insurance to all eligible persons, regardless of their health condition. This also applies to a few European countries. In some of these countries, the insurance premium has to be community rated, and is the same regardless of age - quite likely within a large age band. The purpose of insurance is to make it available and to cover everyone through the principles of pooling.
In the USA and many other countries, it is possible for a motorist, who is unable to get motor insurance from the market, to get insurance from the "residual market". They have to pay a higher premium, but insurance is at least available. The residual market is a pool for those who cannot buy insurance from the normal market. In this pool, the risks are shared by the insurance companies equally or in proportion to their market share.
Singaporeans are used to the "free market" and lack of consumer protection that they are not aware that there are other arrangement that makes insurance available to all at fair rates. They can only think about underwriting for profits. They do not care about the people who cannot buy insurance,unless they are the people who are personally penalised by the system.
A journalist wrote that people who cannot get insurance due to bad claims record should not be driving on the roads. This is easy to say, but does not help the person who is penalised unfairly due to same bad luck. Reckless drivers are banned from driving, but this is decided by the court, and not by "commercial reasons" adopted by insurance companies.
America is addressing the issue of "difficulty to get insurance" by making reforms to their system. The Obama Administration wants to make insurance available through an insurance exchange, and also for a government owned enterprise to offer insurance to compete with the private sector, i.e. the "public option". This recognises the failure of the "free market" in making insurance available to people at fair rates.
Some people misinterpreted my views (stating that I am against the principles of underwriting). They are ignorant of the wider issues. Some are deliberately mischievous in misrepresenting my views.
My view is this - insurance should be underwritten, but cannot be carried too far as to deny consumers the right to get insurance at fair rates. Most commercial companies, working on commercial terms, will not be socially responsible. This is why insurance, along with other important matters in the economic life, should be properly regulated and cannot be left to the profit-driven "free market".
Tan Kin Lian
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