Tan Kin Lian's Blog: Policy wordings

Wednesday, January 20, 2010

Policy wordings

In many states in America, the policy wordings used by insurance companies have to be approved by the regulator. I find this to be a good practice. The regulator can check that the wordings are clear and are fair to consumers. It will minimize disputes that have to be resolved in court. It is also a good practice for insurance companies to use standard wordings for the common types of coverage, rather than be allowed to write their own wordings.

I hope that this practice can be adopted in Singapore and that the regulator can play an active role in achieving this outcome - to ensure fair treatment of consumers.

Tan Kin Lian

5 comments:

Anonymous said...: Singapore operates on caveat emptor -- open your eyes big big. If not happy and no money, then go to FIDREC. If not happy and got money to take chances, then go to court.

Actually, I wonder for really High Net-Worth people (e.g. >50 million dollars) in S'pore -- do they also just buy those crappy wholelife and endowment products off the shelf, with the standardised Terms & Conditions? Or do they send in their lawyers to negotiate better terms with the insurance companies whenever they want to take up a very large cover?

After all, insurance policy is just a business contract between 2 or more parties. There's no standard templates and no such thing as die-die must have this or die-die cannot have this...; January 20, 2010 5:04 PM
Anonymous said...: It is better to buy off the shelves and take responsibility rather than to have a middleman like the insurance agent to screw you up with lies and confusion and cover up.IF you understand you buy and not being conned into buying by agents, good wordings or no wordings.The middleman is NOT a good idea. You know 99% of insurance agents are salesmen with one motive , to sell you a product with hgih commission. It is already doomed from the start if you have salesman.; January 20, 2010 7:12 PM
Anonymous said...: Whether the policy wordings are in your favour or nor you are already disadvantaged at the point of sales by the insurance agents.They don't tell you the truth and only half truth and lies. This tells you that you are not going to get a fair deal and compounded by legal techincality only the lawyer and the company know the odds are stacked so high against the buyers.; January 20, 2010 7:56 PM
Anonymous said...: Dear 5.04pm

If you are worth $50 million, you really don't need insurance to leave behind an estate.

Rich people only buy insurance if their assets/estate are illiquid. Then they need the insurance payout for liquidity/cashflow for their beneficiaries while the executor takes his time to administer the estate.; January 20, 2010 8:25 PM
Anonymous said...: We are already paying million dollar salaries to regulators to tell us that it is not their job to regulate.

Their job instead is to "regulate with a light touch" (i.e. do as little work as possible) and let the free market work its magic.

It sure was magical to watch a few trillion dollars disappear worldwide in Oct 2008. I've lost track of the millions in Singapore. Or was it billions?

So now if we ask the regulators to actually regulate, does this mean we will have to increase their salaries again? After all, we are asking the regulators to take on more "workload" right?; January 20, 2010 11:41 PM