Letter published in Straits Times
WITH reference to last Saturday's report ('Windfall for jumping ship'), there are many factors in the scrum by insurers to lure agents away from rival firms.
One is the client list of the agents, a consequence of which will lead to a churning of insurance policies. In such scenarios, clients are persuaded to cash in their existing policies to buy a new one.
To lessen the risk of such negative effects, the Life Insurance Association should consider organising seminars to educate the public.
The association should have rules to ensure that agents fully inform their clients on the implications of surrendering their policies for another one. These measures seek to ensure that the public know the effects of churning and that their decisions are informed ones.
In the report, the association remarked that it took a serious view of churning or any activity that hurts a policyholder's interest.
The association should inform the public about its penalties against errant agents who actively resort to churning. Such transparency may also deter agents who are thinking of resorting to this practice.
Such measures will not only help safeguard public interest against errant agents, but also maintain the high standards and reputation enjoyed by the profession.
Javern Sim
One is the client list of the agents, a consequence of which will lead to a churning of insurance policies. In such scenarios, clients are persuaded to cash in their existing policies to buy a new one.
To lessen the risk of such negative effects, the Life Insurance Association should consider organising seminars to educate the public.
The association should have rules to ensure that agents fully inform their clients on the implications of surrendering their policies for another one. These measures seek to ensure that the public know the effects of churning and that their decisions are informed ones.
In the report, the association remarked that it took a serious view of churning or any activity that hurts a policyholder's interest.
The association should inform the public about its penalties against errant agents who actively resort to churning. Such transparency may also deter agents who are thinking of resorting to this practice.
Such measures will not only help safeguard public interest against errant agents, but also maintain the high standards and reputation enjoyed by the profession.
Javern Sim
http://www.straitstimes.com/
My view
The churning of insurance policies has been a serious problem over the past decades. Many consumers had been the victims of this unethical practice and have lost large amount of their savings.
The insurance companies are partly to blame, as they introduce new products, supposedly with better features, and give the chance for their agents to get unsuspecting customers to replace their policies.
To overcome this unethical practice, it is necessary for the regulator to place limits on the amount of commission that can be paid on life insurance policies. This problem has been recognized in many countries and the appropriate action has been taken by the regulator.
My view
The churning of insurance policies has been a serious problem over the past decades. Many consumers had been the victims of this unethical practice and have lost large amount of their savings.
The insurance companies are partly to blame, as they introduce new products, supposedly with better features, and give the chance for their agents to get unsuspecting customers to replace their policies.
To overcome this unethical practice, it is necessary for the regulator to place limits on the amount of commission that can be paid on life insurance policies. This problem has been recognized in many countries and the appropriate action has been taken by the regulator.
Churning is VERY common in the industry. The objective is to generate commission and also to meet quota and mdrt rubbish awards. MAS should recognise this has been on the increase when the market is bullish, when people are more confident of job security that their reason faculty becomes numb and becomes the workshop of rogue insurance agents. This is a rampant practice and churning can take many forms.
ReplyDeleteIt can disguise as switching.
It can disguise as buy one get free.
It can disguise as reinvestment.It can disguise as paid up.
Why?
In the market today there are so dubious new products that come as limited payment wholelife, endowment and even annuity.These products are worse than the old products and don't serve the needs of buyers as efficiently and effectively the old ones. The benefits are spread thin to confuse and cover up the truth of the products.
Churning happens when consumers are CONNED into canceling their old ones to buy the scams touted as revolutionary. The truth is the insurers are coming out with more revolutionary ways to con consumers.
Do the insurers care?Is there such things as NEW products? They are bad products wrapped in many layers of dubious benefits. It is absolutely rubbish to find your loss of job can be saved by a waiver of premium or a retrenchment premium waiver. This is conjob only salesmen and conmen can conceive of.
Do the companies care? They care 2 hoods. All they care is the sales and the emphasis is SALES.They even have endearing title for their salesmen like SALES CHAMPIONS.Audit their production and even the most experienced will be shocked too.
MAS must step in. IT IS THE COMMISSION and nothing else.Stop them in the name of the people.
You are too negative.
ReplyDeleteSome agent are bad, not all.
I bet you have cancelled all your insurance policy or you have never bought one as you are so negative.
Agent are doing business. Insurer are doing business. Customer getting a product that fits their needs and wants. All win-win-win.
What is wrong with the commission? Yes, may be it is too high but did you buy a car? Did you shop for clothes? Did you buy food? All business is making money, from you, by providing your needs and wants.
Come on... i believe consumer must be more intelligent in selecting who to serve them. i believe consumer must educate themselve more with financial knowledge.
Don't just criticise the insurance agent or the industry. It exist for over hundred of years for a reason. The world is getting more complicated, so does the product.