U.S. health insurance giant WellPoint Inc. revealed Friday that it boosted its chief executive's compensation 51% last year. Chief Executive Angela F. Braly saw her total compensation shoot to $13.1 million, from $8.7 million a year earlier. "It's unconscionable," said Mark Weiss, a Century City podiatrist whose policy will jump 35%.. "How much more does somebody need?"
http://www.latimes.com/features/health/la-fi-wellpoint3-2010apr03,0,3259739.story
Someone complained to me that top executives in life insurance companies in Singapore are getting big salary increases while the bonuses to policyholders are being cut. It is sad that the regulator does not realize that they have a responsibility to protect the welfare of policyholders in getting a fair return on their long term savings.
In Ntuc Income today it is top heavy. Everybody is either a senior VP, VP or Head of department, more chiefs than indians. I wonder how much is needed to pay these people off every month and where is the source.
ReplyDeleteIs it from the bonus? No wonder all their products have low return . Like their revosave which is a con product and vivolife their return is more 'than the bank" only and which the agents are right.If you keep your money in the bank for 30 years do you know how much you would lose? That is exactly ntuc products will pay ....losses like the bank.
Why is this happening? Why it didn't happen in the old days? Very obvious, lah.. Top heavy means a lot of money goes to pay at your expense like those in the Wall Street CEOs, pay themselves and pass the cost to the suckers , consumers and the policyholders.
Wake up from your coma and be conscious of unconscionable practices that are going the insurance companies.
I think one good proposal that govt was considering earlier was using the escrow account, but the unit trust and life insurance industries fought tooth-and-nail against it.
ReplyDeleteEscrow accounts has been successfully used to protect Singapore property buyers, to prevent the property developer towkay from using money collected from homebuyers as his personal ATM. If the property developer tries to submit claims for his KTV expenses, overseas trips, or mistress allowances from the escrow account, the junior bank clerk would reject his claims. So the money in the escrow account would only be used for genuine expenses to build the condo.
The unit trust/ life insurance industry cited lame excuses that using escrow account would add to their costs (I don't think their is much cost increase actually). But I think their real motives are somehting else.
I think there is definitely a good case for escrow accounts, at least for funds/ policies targeting the CPFIS. If the fund doesn't like escrow accounts, then don't participate in CPFIS lor. They can still sell their funds for non-CPFIS, or sell to foreigners.
Sure, we want to promote fund management, but we want only bona fide fund management, not funds that try to snook consumers.
I think escrow accounts can also be used for spa packages/ private school fees/ etc.. Escrow accounts is about prevention, and not allowing short-sighted businesspeople to be tempted by money from consumers' advance payment piggybank.
Audited accounts is basically useless, cos you only discover the fraud more than 6 months after year-end, but which time you can do nothing, cos money is all the money is gone.
The curious thing is this: when financial institutions (eg. banks, hedge funds, corporates, etc) invest with each other, they would insist/ request on using escrow accounts. And they never complained about any additional costs.
ReplyDeleteBut how come when unit trusts/ insurance coys handle consumer money, they start complaining about escrow a/cs adding to costs.
I think they don't like the features of escrow accounts, which prevent them from using consumers' money like their personal ATMs.
It is very unethical and unprofessional for insurance companies to cut the bonuses of existing policies. If they want to cut the bonuses to pay for the increased expenses, then the cut should come from new policies yet to be sold. In this way, consumers will know what they are getting in and for.
ReplyDeleteThe regulations governing insurance companies for whole life policies are really too loose. It appears to me that the insurance company is given a free hand to do anything they want with policy-holders' money. Insurance bonuses seems to be at the discretion of the insurance execs. If they happy, they give you a little more bonus. If they not happy, they can deny you bonus.
ReplyDeleteIf the insurance company CEO has a heart, then this may work. If insurance CEO has no heart, than policy holders would be at his mercy.....
Mr Tan, can you let me know if the following is theoretically possible: That a top exec of insurance company would place his mistress on the payroll, and then use policyholders' money to feed his mistress?
Unconscionable spending like incentive trips, wine and dine in posh hotels and huge salary for senior management will eat into the return of the products. Needless to say the products will be expensive and the return low and the only way is to drive down the throats of the existing trusting policyholders. How daring the agents will do depends on how large the commission and incentive. Spending more on the agents further aggravate the return. Therefore it is not a surprise that ntuc products like Reevosave and Vivolife give poor return and having to hold for as long as 25 years to get only pathetic 2% and this poor return is not disclosed to the buyer as trust is behind the sale. So you see how trust is betrayed.
ReplyDeleteAssociation like FISCA should come out to expose the ruse and champion the cause of these consumers who always fall victims without even their realising it.
It is about time.
I think the regulators are somehow more concerned with the compliance rather than welfare of the policyholders. i am not sure, but if it is a lousy product and people still buys into it, it seems to be a commercial decision. As long as there is no fraud or misrepresentation, and the insurance company can make good of its promises, why should the regulator care whether it is good or lousy product, and if who and how get big fat salary increment?
ReplyDeleteWith the ex-AAA rated insurer AIG changing its name to Chartis, and coming out so strongly advertising "the power of WE" only to be sold to Prudential shortly, why should one buy into participating life policies or even investment linked insurance? Will the insurance company still be around? And if they are still around, are the returns attractive? The bonus is at the sole discretion of the insurance company and will the funds/policy tied on long term basis, the policyholders can only protest and lament feebly in the AGM. Such AGM are usually drowned by the insurance company staff as the heavy weights seek comfort in numbers. Nothing much is achieved, or can be achieved. The press or regulators most probably don't care much
With all negative publicity going around, why even bother to buy life insurance with bonus or investment linked product?
Just get a term life insurance, hospital insurance, personal accident insurance should suffice. Buy the protection, do yourself a big favor by reducing your premium. If you want to save your money or invest so as to make a higher return, go find other financial instruments instead. There are plenty outside
Jerome
Wife of Minister think that TT Durai bonus of $600,000 is PEANUT during difficult time, Govt pay itself more money then what other Govts in the World, so what's wrong with NTUC being top heavy i.e. top paid handsomely while policies owners' have their bonus cut? Monkeys do what Monkeys see. If the authority is doing the same, why should they investigate or setup rules to stop it? It is like limiting their ability to pay themselves handsomely.
ReplyDeleteGreat to hear Bishan/Toa Payoh Ward is part of the opposition plan to contest in the next election. With good candidates, ministers should think more about service to nation than making themselves millionairs many times over...
There goes your bonuses and without seeking approval from you policyholders.
ReplyDeleteThe Income Family Micro—Insurance Scheme (IFMIS) will pay out S$5,000 in the event the main caregiver passes away or becomes totally and permanently disabled.
IFMIS is expected to cost NTUC Income up to S$500,000 over the next three years.
The scheme should be named after policyholders because the money is from the life fund or earnings that are going into the life fund to be distributed as bonuses, but diverted to make the FT look good, right? Who benefits from this generous gesture? WHO?? you know who!!!!!it is self serving,right? ans with whose money? yours!!!!!