Doris (not her real name) approached me for advice. She bought a policy from AIA many years ago and named her husband as the beneficiary. The marriage broke down. She subsequently changed the beneficiary to her son.
Recently, AIA told her that the nomination of her son was invalid, as the policy was covered under Section 73 of the Conveyancing and Law of Property Act and the any change of beneficiary required the consent of the original beneficiary.
As Doris had no contact with her ex-husband, she was advised to approach a lawyer to assist on this matter. The lawyer said that the legal fees would be over $3,000 and would include taking a newspaper advertisement to locate the original beneficiary.
Doris asked for my advice.
I looked at the policy document, and there was no mention of Section 73. It was a standard policy which allowed the policyowner to change the beneficiary at any time. The AIA staff must have "imported" the Section 73 into this policy out of his or her own interpretation. It was outside of the provision of the policy and was not the intent of the policyholder.
I remembered a case a long, long time where the judge said that Section 73 would apply in that case. But the circumstances of the case could be different.
Doris said that she had taken a similar policy with another insurance company which had allowed her to change the beneficiary without any problem.
The position taken by AIA seemed to be unnecessary and unfair. It had caused a lot of trouble and stress to Doris. They could have taken the position that Section 73 did not apply to this policy, as there was no intention from Doris to place it under that law. She said that the AIA agent who sold the policy did not explain at that time that the policy would be subject to that law. In fact, it was probably not the intention of any of the parties at that time.
The Section 73 was not even a Singapore law. It was a law passed in England many decades ago. It is an outdated law.
It is sad that there is this uncertainty caused by a vague and outdated law that was not intended to apply in the first instance.