Saturday, March 07, 2009

Survey: Marina Bay Sands

Here are some information atbout this integrated resort.
What are the its business prospects? Give your views in this survey.
Here are the survey results (49 replies).
Conclusion: The Marina Bay Resort will help the economy in a small way , but not optimistic.

Friday, March 06, 2009

Timing of the General Election

Participate in this survey.
Here are the survey results based on 49 replies.

Money does not attract talent - it merely attracts greed

Read this article.

Avoid the risk of a life insurance policy

To consumers:

When you buy a life insurance policy, you are taking a big risk. You do not know what will be the inflation and mortality rates in the future. In spite of this, you are required to commit a fixed premium payable for many years into the future.

The insurance company does not know the future rates either. So, they have to take a risk. If they guarantee you a favourable rate and the trend goes against them, the insurance company can declare bankruptcy. You will lose a large part of your savings.

If they declare a conservative rate and there is high inflation, you will lose out. The money that you have saved for many years will be paid back to you in depreciated dollars. The insurance company keeps the excess as their exceptional profit.

To overcome this uncertainty, many insurance companies have to operate on a participating fund. The insurance company guarantee a low rate of return on the participating policies, and promises to pay back a large part of the yearly surplus to the policyholder in the form of a non-guaranteed bonus.

This arrangement is fine, provided that the insurance company can be trusted to treat its policyholders fairly in the distribution of the bonuses. But you have to take another risk - can you trust your insurance company to give you a fair rate of return?

In the past, the insurance companies observe a high standard of conduct in the distribution of the surplus.  In recent years, this standard has been eroded. Many insurance companies are now prepared to short change their policyholders in the pursuit of more profit for their shareholders or for their sales growth. For example, they declare a lower rate of return on their old policies and introduce new products that give a better return to boost their sales. This is unfair and at the expense of the old policyholders.

If this happens to you, you have a recourse. There are regulations in Singapore to ensure that the policyholders are fairly treated. If you have bought a participating policy and have been given a poor rate of return, compared to other policyholders who have bought a new series of products, you can lodge a complaint with the regulator, which is the Monetary Authority of Singapore. They will take up the complaint on your behalf and will ask the insurance company to justify its stand.

If you are going to make a long term commitment in a life insurance policy, you should choose an insurance company that can be trusted to act fairly in the interest of its policyholders. There is a lot of uncertainty at this time on which insurance company can be trusted to observe this principle. It is best that you do not put your long term savings in a life insurance policy, as you are subject to the risk of being denied a fair rate of return.

It is better to buy accident or term insurance to cover your risk and to keep your savings in a low cost exchange traded fund. Many of these funds are offered in the market.

You can get more details by reading the FAQs in my website.

Tan Kin Lian

Twisting a policy

Dear Mr Tan,
I was deeply troubled by a 20 year limited premium policy that bought from NTUC Income 2 years ago. I bought the policy for my daughter to provide her with lifetime coverage by paying the policy premium for 20 years.

Recently, NTUC Income no longer accept new policy for the product and was replaced it with a similar limited premium product called Revo Life. My agent said that my existing policy is inferior to the new Revo Life:

1. My existing policy is more costly for the same amount of coverage
2. Revo Life took a much shorter period to breakeven
3. Revo Life provides extra benefit of 3X payments on accident coverage.

Why is the original product more costly with less coverage, where the contract already specified the % of premium that represented the distribution cost in maintaining the policy.

Could this be due to some miscalculation that caused the higher cost in initial policy?

As the consumer has not been notify of this difference, people who purchase the original 20 years limited will continue to pay more for less for the remaining year!

Do you think the consumer have the right to ask for some kind of bridging arrangement to the newer policy with minimum loss? I was suggested by the underwriter (through my agent) that I should cancel my policy (with a huge loss of course) and buy the new policy. Do you think this is a fair suggestion?


You should ask the agent to present a detailed comparison of the cash value of the old policy and the new policy after 5, 10, 15, 20 years and the premium. You can read the FAQ in my website,

You should also consider this point. By stopping the old policy and taking a new policy, you are suffering the high front end charge again (which can take up more than one year of your savings).

Normally, it is unethical for an agent to advise a client to stop an old policy and take up a new policy, as it is against the interest of the client. This is called "twisting a policy". You can lodge a complaint to NTUC Income against this unethical practice.

It is not correct for an insurance company to introduce a new product that offer a better return compared to an old product. This is unfair to existing customers. It is their duty to ensure that existing customers are given a fair return, through higher bonus, compared to new customers. You can ask NTUC Income's management to give their comment on this point.

You can also raise this matter with the Monetary Authority of Singapore. They will ask NTUC Income to give you an explanation. If you are not satisfied with the reply, you can discuss with MAS.

Thursday, March 05, 2009

Insurance and technology

How should a country use technology to deliver insurance to its people efficiently and usefully? This  paper contains some of my ideas.

Be considerate and give way

To motorists in Singapore

When you see the car in front of you signal its intention to change lane, do slow down, give way and let that car move into your lane.  The driver may be unfamiliar with the road and realised, quite late, that the car is in the wrong lane. 

Do not sound the horn loudly and speed up to "chop" your place in the lane. Use your brake, rather than your horn. It does not cost you to be considerate and helpful. It will make life better for everyone in Singapore.

Tan Kin Lian

Performance of the Government

How do you rate the performance of the Government and ministers in running the country and managing the economic crisis? Join this survey.
Here are the preliminary survey results based on 49 and 97 replies.

HK: Minibond mom hits bank for $6m

A customer has filed a writ against Citic Ka Wah Bank in the High Court seeking the return of HK$6 million she invested in Lehman minibonds, alleging she had not been informed of the risks involved.

Lau Wai-lan, 45, is suing the bank for misrepresentation, unconscionable conduct and negligent investment advice. She is being assisted by the Democratic Party.
Lau is a single mother of three. She received secondary education but suffered a chronic brain injury in 1994 and has not been able to work since. Her sister, Lau Wai-ping, said Lau has been under immense mental stress since the failure of Lehman Brothers.

She has twice attempted suicide and is now on a regime of tranquilizers.

"We sent a few letters to the bank and the Securities and Futures Commission in October, but we received no assistance. This is our last resort," Lau Wai-ping said.

In 1995, Lau Wai-lan divorced her husband and sold her assets for HK$6.2 million. She put the money in a Bank of China fixed-time deposit and used the interest to support her three children, who are now aged eight, nine and 15.

On January 6, 2006, Lau claimed she was persuaded by a staff member she had known for several years to put HK$3 million into a 4 percent fixed-term deposit account at the Tai Wai branch of the bank.

But two weeks later, Lau broke the deposit to invest in the minibond series 23 HKD fixed- rate callable credit-linked notes due 2011 after being allegedly assured the investment was "low risk" and "safer than a bank deposit with triple A guarantee." Lau was also guaranteed a 5.1 percent interest rate.

On August 16, she transferred another HK$3 million in savings from her Citibank account and invested in minibond series 27.

Lau Wai-ping insisted her sister always reminded staff of her physical status and asked them not to introduce her to high-risk products.

In the writ, Lau maintained she was never told she might not obtain any refund of the principal at the end of the investment period. She was also not informed of any commission or financial interests involved.

The writ said the bank should perform a duty of care towards Lau, as well as provide proper advice and assistance. Lau was also rendered unable to make informed decisions as to what was in her own best interests.

Legal action on Credit Linked Notes

Several investors had received the rejection letters on their claims for compensation. They have been disappointed at the outcome, after waiting for several months. They felt that they were unfairly treated and are keen to take collective legal action now.

A few legal teams have been organised. Before you decide to join any collective action, you should get answers to the following questions:

1. What are the legal grounds proposed by the lawyer to pursue the claim for compensation?
2. What are the chance of winning based on the strategy proposed by the lawyer? Why and how?
3. What are the terms of engagement of the lawyer? 

Terms of engagement
a)  What is the initial amount payable
b) What are the estimated payments for the various stages of the case?
c)  What are the actual charges to be paid to the lawyers
d) Is there a maximum cap on the legal fees and charges?
e) If the cases are settled earlier, will the participants get a refund of the unused fees?

Before you sign on the letter of appointment and write your cheque, you should attend a briefing to be given by the lawyer where all of the above points have been explained and accepted by you. If you are not sure, you should get the viwes of fellow participants and make your personal judgement.

You still have the option of getting your case adjudicated in FIDREC for a fee of $50. You can ask FIDREC to get the financial institution representative to complete this questionnaire, so that the adjudicator has the full facts on both sides to make an adjudication.

Wednesday, March 04, 2009

There was no one left to speak for me

Extract from the letter by Lasantha Wikramatunga, assassinated editor of a newspaper in Sri Lanka.

People often ask me why I take such risks and tell me it is a matter of time before I am bumped off. Of course I know that: it is inevitable. But if we do not speak out now, there will be no one left to speak for those who cannot, whether they be ethnic minorities, the disadvantaged or the persecuted. An example that has inspired me throughout my career in journalism has been that of the German theologian, Martin Niemoller. In his youth he was an anti-Semite and an admirer of Hitler. As Nazism took hold in Germany, however, he saw Nazism for what it was: it was not just the Jews Hitler sought to extirpate, it was just about anyone with an alternate point of view. Niemoller spoke out, and for his trouble was incarcerated in the Sachsenhausen and Dachau concentration camps from 1937 to 1945, and very nearly executed. While incarcerated, Niemoller wrote a poem that, from the first time I read it in my teenage years, stuck hauntingly in my mind:

First they came for the Jews
and I did not speak out because I was not a Jew.
Then they came for the Communists
and I did not speak out because I was not a Communist.
Then they came for the trade unionists
and I did not speak out because I was not a trade unionist.
Then they came for me
and there was no one left to speak out for me.

If you remember nothing else, remember this: The Leader is there for you, be you Sinhalese, Tamil, Muslim, low-caste, homosexual, dissident or disabled. Its staff will fight on, unbowed and unafraid, with the courage to which you have become accustomed. Do not take that commitment for granted. Let there be no doubt that whatever sacrifices we journalists make, they are not made for our own glory or enrichment: they are made for you. Whether you deserve their sacrifice is another matter. As for me, God knows I tried.

Dispute Resolution through FIDREC

If you have lodged your complaint to FIDREC, please read the following advisory from MAS

You have probably been asked to complete a questionnaire to provide the facts on your complaint. This puts the onus on the investor to justify the claim.

As the complainant, you can ask FIDREC to get the financial institution's representative to complete a questionnaire based on the attached questionnaire. This will provide information for the adjudicator to decide on any possible mis-selling of the product.

I have asked the Consumer Association to suggest to FIDREC that this questionnaire should be used. I have not heard about any decision on this matter. 

As you investor, you can ask FIDREC to get the answers to this questionaire, in the interest of fairness and natural justice. I hope that you find this questionnaire to be useful to support your complaint,

Support needed from noteholders of Pinnacles Series 9 and 10

The Pinnacle Action Group wishes to write to MAS to investigate into the Pinnacle product that was engineered by Morgan Stanley. The group has consolidated some findings in series 9 and 10 and has identified several questions and they wish to get the regulator (MAS) to investigate.

They need the support from noteholders of the Pinnacle Series 9 and 10 to sign electronically on a letter to be sent to MAS. They like to ask the noteholders to write to with their name and email address.

Obama: Bush government tried to undermine unions

WASHINGTON (Reuters) - President Barack Obama said on Tuesday the Bush administration had tried to undermine organized labor and he assured U.S. labor leaders they would always have a "place at the table" under his presidency.

"We need to level the playing field for workers and the unions that represent their interests," Obama said in prepared remarks for a video address to the executive board of the AFL-CIO, the largest U.S. labor federation, meeting in Miami. 


Buy a property report for $25

Before you buy, sell or rent a property, invest $25 in a property report. Here is a sample report
If you are interested in this introductory offer, complete this form.

Book launch: How to survive unemployment

My friend, Gilbert Goh is launching his book. He asked me to speak a few words of support. Please attend the book launch, if you are free

Hi Friends
I have written a book entitled "How to survive unemployment" and it will be launched on:

Date:  7 Mar 09 (Sat):
Time:  5.15pm - 6.45pm
Place: Bishan Library Level 2

Please pick up a copy of the autographed book if you are coming. The price per copy is only $11.00. The price at major bookstores will be higher.


Consider a relief loan for needy workers

Read this article.

MANY businesses are suffering from a severe drop in consumer spending. They are not able to earn enough revenue to pay their wages and other expenses.

These businesses are not able to get the bank credit needed to tide them over until the economy recovers. The banks are reluctant to take the credit risk, even though the Government has agreed to underwrite 80 per cent of any loss.

The Jobs Credit scheme may help these businesses to reduce their operating costs by 5 per cent to 10 per cent, but will not be sufficient to stem the losses. These businesses will then have to retrench their employees.

Many thousands of employees face the prospect of losing their jobs in the near future. The $20.5 billion resilience package will not help them. Job fairs will also not help.

I suggest that a relief loan scheme be introduced. This scheme is to be administered by a government agency and will allow a worker who has suffered a loss or drop in earnings to apply for a loan to cover the shortfall (subject to a monthly cap).

This loan will be subject to an interest rate of 2.5 per cent and can be drawn for a period of up to 24 months. The loan has to be repaid from future earnings or withdrawal from CPF savings.

This is a loan, not an unemployment benefit. It will provide financial relief to affected people who will then not need to rely on credit cards or loan sharks and bear a high interest burden. It will also reduce the bad debt burden from the banking system.

There will be some abuse of this relief loan, but practical measures can be implemented to reduce the abuse. For example, the applicant may be required to sign a statutory declaration and get the endorsement of a responsible community leader.

Some people may not be able to repay the loan, no matter how hard they try. These cases can be investigated at a later date and a portion written off. It can be decided by practical judgment.

I hope that a relief loan scheme can be introduced immediately to alleviate the hardship and suffering of many families. It will also help to maintain a modest level of consumer spending and keep the domestic economy going as best as possible, until the global economy recovers.

Tan Kin Lian

How to make electronic medical records a reality

Read this article.

Use techonology to improve bus information

Some people, especially the elderly, have poor eyesight. They may not be able to see the service number of the bus that is approaching the bus stop, until the bus is close by. By that time, it may be too late to signal for the bus to stop. The passenger will also have to strain the eyes to look out for the number of all the approaching buses.

I suggest that we use technology to solve this problem. The approaching bus can transmit its service number electronically to a display located at the bus stop. This display can display not only the bus number but also the main rout and destination of the bus. It will be a good service to the passengers and may encourage more people to take the bus.

I hope that the bus operators will take up this suggestion. Perhaps the Land Transport Authority can provide the encouragement by paying for the infrastructure cost.

Tan Kin Lian

Sunday, March 01, 2009

Secure investments 'misleading'

Secure investments 'misleading'
By Samantha Washington
BBC Radio 4's Money Box

As guarantor, Lehman going bust did not result in compensation
Thousands of people who put their money into investments that promised their capital was secure face losing some or all of their money.


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