Ferrari Crash - two views

FATAL FERRARI CRASH

 

Insurer right to refuse claim...

Michael Ng

 

I DISAGREE with Mr Tan Kin Lian's observations and conclusions

("Ferrari crash: Regulator should step in"; Tuesday).

 

While consumer protection is a laudable goal that should be rigorously pursued,

there is a line between vigilant protection of consumers

and indiscriminately criticising finance-related companies.

http://www.straitstimes.com/premium/forum-letters/story/insurer-right-refuse-claim-20120922

 

 

 

... If that is so, why charge higher premiums?

G. Krishnamurthi

 

I HOPE the Insurance Commissioner addresses the point

raised by Mr Tan Kin Lian on Tuesday

("Ferrari crash: Regulator should step in").

 

Aren't higher premiums meant to cover the insurers,

partly against the higher risk of exactly such claims of negligence

expected from such drivers?

http://www.straitstimes.com/premium/forum-letters/story/if-so-why-charge-higher-premiums-20120922

 

ACRA returns

I received a reminder to file my ACRA returns. I acted promptly on the reminder

but had to pay a filing fee of $20 and a penalty of $120 for filing the returns late. 

ACRA did not remind me earlier. 

I was not given a copy of my own filing, in spite of paying the filing fee. I needed

a copy of my company profile to submit to another government agency. I had to 

pay $5.50 to buy my own profile. Apart from this payment, there was the 

added inconvenience of making a payment by credit card.

I suggest that ACRA should waive the filing fee, and also make a copy of the 

company profile available at no charge to each entity that files its return.

Interest rate on installment plan

During festive seasons, you can see advertisements of consumer products that can be bought for cash or installment plan. This article shows you you can calculate the interest rate on an installment plan. The interest rate paid by consumers is much higher than they are aware of. http://tankinlian.com/admin/file.aspx?id=683&IID=687

To avoid paying the high interest rate, consumers should learn how to manage their finances. They can attend the course on financial planning conducted by FISCA, www.fisca.sg

Access to AMD Register

21 September 2012

Editor

Forum Page

Straits Times

I am quite disappointed to see this reply from the Ministry of Health (Access to AMD register 
balanced with safeguards on patient confidentiality, ST 21 September)

A large portion of the lengthy letter was written to justify their current practice. The complaint 
from Ms Krishnan was that the hospital does not know about the existence of the AMD. She was
not asking for the actual content of the AMD to be disclosed, but to know that it had existed. 
This is a simple and sensible requirement.

MOH acknowledged in the closing paragraph that they agree with this suggestion and 
will be implementing it. Why can't the reply from MOH go straight to this essential point?  

It is quite strange that up to now, the hospital is still relying on manual access 
to the AMD register.

Tan Kin Lian

Health care system in Canada

Wing Lee, a former Singapore citizen and now a Canadian citizen, shared this perspective about the health care system in Canada.

Dear Kin Lian,

I believe you asked about the Canadian healthcare system which I have delayed in replying.  I have recovered well after 3 weeks in hospital. I am up and about doing my regular routine and catching up with my emails.

The Canadian Healthcare is compulsory for all citizens and permanent residents including Singaporeans or other nationalities working in Canada on assignments. You must be working or living in Canada for at least 3 months before entitlement of the Canadian Healthcare. For individual, the healthcare premium is about $150 per month. For family, there is a group premium. My wife and I paid $116 per month or C$58 each. Most family doctors and patients are friends. For example, my family doctor has been our friend since we immigrated 25 years ago.

In Canada, doctors and healthcare system including nurses, pharmacists, administrators, treat patients like human beings with passion and care. This is something lacking in the Singapore healthcare system.

It is a one class healthcare system regardless if you are in minister or ordinary citizen we all get the same treatment. I do not understand why the Americans are against President Obama. The British are envious of our system. The following two links will give you an idea of the Canadian healthcare.

http://www.bbc.co.uk/news/magazine-19594334

http://www.youtube.com/watch?v=ht7r11uymWc

Canadians are very happy with their healthcare system with more than 80% approval rating.

Cheers
Wing Lee

End of life - no medical bills

Isabel Ling shares this story of her father passing away, with no worry about medical bills.
http://tankinlian.com/admin/file.aspx?id=682&IID=686

Forum to discuss the Internal Security Act

Two NGOs planned to organize a forum to discuss the Internal Securities Act. This has turned out to be a messy affair, with the involvement of the Archbishop of the Catholic Church and the Government. Here is an account from the perspective of one blogger, who is in the center of the controversy.

http://yawningbread.wordpress.com/2012/09/21/three-statements-from-the-government-function-8-and-maruah-on-the-archbishop-affair/

Fee guidelines are helpful to consumers

Here is my letter published in the Straits Times
http://www.straitstimes.com/premium/forum-letters/story/fee-guideline-will-lower-rather-raise-prices-20120921

And a letter from Dr. Yii
http://www.straitstimes.com/premium/forum-letters/story/balance-doctor-prefers-medical-fee-guideline-patients-20120921

And from the Medical Associationi
http://www.straitstimes.com/premium/forum-letters/story/life-or-without-medical-fee-guide-comparison-already-possible-20120921

Fee guidelines are useful

29 September 2012

Editor, Forum Page

Straits Times

Mr. Joshua Seet said that medical fee guidelines may lead to higher prices for everyone 

as it will encourage practitioners to match the recommended guidelines (ST 19 Sep).

I hold a different opinion. The fee guidelines will be helpful to consumers and will also most likely 

lead to lower prices.

I have been approached on several occasions by consumers on how much they should pay in

legal fees to write a will or obtain probate for an estate. The Law 

Society does provide in its website some lawyers that provide the service, but they are not

able to give the fee guideline. The consumer need to call several lawyers just to get an 

indication of the fees.

I have also experienced difficulty in getting the fee to notarize a contract with an overseas party.

My staff had to spend more than two hours just to get the information. A fee guideline would 

have been helpful.  

I am sure that most patients, being consumers,  would welcome the existence of a fee guideline 

for medical treatment as well.

The publication of the fee guidelines will encourage competition and lower prices. Some 

new practices would tell their clients that they are charging lower fees, compared to the guidelines,

because they are newly established or have lower cost of operation. Consumers who

are cost conscious may opt for their services.

If the fee guideline had been published, some reputable practitioners may charge above the 

guidelines. Consumers who accept these fees willingly do not have cause to complain 

that they have been misled.

I urge the Competition Commission to review its stance on fee guidelines that are set

voluntarily by professional associations. They serve not only the interest of their professional

members, but the interest of consumers as well.

Tan Kin Lian
President
Financial Services Consumer Assocation

www.fisca.sg

Be careful of bad workshops

If you meet with an accident and the workshop promises to take care of the repair and make a claim against the third party - be careful about accepting this offer. A few people have got themselves into hot soup.
http://tankinlian.com/admin/file.aspx?id=679&IID=682

FISCA talk - Priorities @ Retirement

More than 300 people have registered for my free talk on "Priorities @ Retirement". This is targeted at older people approaching retirement. To accommodate the large number, the talks will be held in September, October and November.
www.fisca.sg

Adequate CPF for retirement?

Is CPF adequate for young people to retire?
Lucky Tan ask for this matter to be studied carefully.
http://singaporemind.blogspot.sg/2012/09/why-minister-tharmans-claim-needs-to-be.html

Safe investment that yields 5%

Investors who are risk averse want to look for safe investments that give a yield higher than inflation. Here is the tip that I give to people who attend my talks on investment and financial planning. It is what I learned over 40 years and is given free to consumers!
http://tankinlian.com/admin/file.aspx?id=681&IID=685

How Torch died

This is taken from an article "How Doctors Die" by Dr. Ken Murray. 

Summary: Torch had the choice to be treated and prolong his life by four 
months. He went untreated and lived for eight months, and had a memorable 
time with his cousin.

Several years ago, my older cousin Torch (born at home by the light of a flashlight—or
torch) had a seizure that turned out to be the result of lung cancer that had gone to his
brain. I arranged for him to see various specialists, and we learned that with aggressive
treatment of his condition, including three to five hospital visits a week for
chemotherapy, he would live perhaps four months. Ultimately, Torch decided against
any treatment and simply took pills for brain swelling. He moved in with me.

We spent the next eight months doing a bunch of things that he enjoyed, having fun
together like we hadn’t had in decades. We went to Disneyland, his first time. We’d
hang out at home. Torch was a sports nut, and he was very happy to watch sports and
eat my cooking. He even gained a bit of weight, eating his favorite foods rather than
hospital foods. He had no serious pain, and he remained high-spirited. One day, he
didn’t wake up. He spent the next three days in a coma-like sleep and then died. The
cost of his medical care for those eight months, for the one drug he was taking, was
about $20.

Torch was no doctor, but he knew he wanted a life of quality, not just quantity. Don’t
most of us? If there is a state of the art of end-of-life care, it is this: death with dignity.
As for me, my physician has my choices. They were easy to make, as they are for most
physicians. There will be no heroics, and I will go gentle into that good night. Like my
mentor Charlie. Like my cousin Torch. Like my fellow doctors

Lucky Tan's perspective of the National Conversation

Lucky Tan talks sense. Our Prime Minister's approach towards the National Conversation is already getting a lot of skepticism. Perhaps, the PM should read what Lucky Tan has said.
http://singaporemind.blogspot.sg/2012/09/national-conversation-need-for-major.html

End of life care

Society needs to find a better way to handle end of life care.
http://www.bbc.co.uk/news/health-19634617

How doctors die

Many people are worried about the high cost of health care when they fall seriously ill, at an old age. They ask me for solution.

 Why don't we ask the doctors? They also suffer from cancer and organ failure. They also die eventually.  What do they do? How do they pay for the high cost of their own health care?

Be ready for some surprise! Read this article. http://tankinlian.com/admin/file.aspx?id=639&IID=293

Reply from ACRA

Mr Tan Kin Lian, in his letter

"Better processes make for better business sense" (Sept 13),

cited difficulty in filing his company's annual returns through the ACRA's online system.

We again extend our offer to Mr Tan to tell us

if he wants to participate in stakeholder dialogues

and give his views on how we can further improve our systems and processes.

http://www.todayonline.com/Voices/EDC120918-0000125/ACRA-developing-new-electronic-filing-system

Comment
I was invited to attend the stakeholder dialogue. I accepted on 16 April. They
told me that they will invite me. I heard nothing from them for five months. Now
they want to re-invite me, suggested that I was unwilling to participate in their dialogue.

Immigration card

Why are visitors to Singapore still required to complete an immigration card? This practice has been abandoned in many countries, including Malaysia. The visitors passports are scanned and most of the required information can already been obtained from this exercise.

I can think of two reasons for continuing this practice:

a) To collect data for tourism
b) To warn visitors about the severe penalty for drug offences.

Both of these goals can be achieved in more convenient ways, for example:

a) Give a flyer to visitors passing through immigration to warn them about the penalty.
b) The tourism statistics can be obtained through other sources, e.g. occupancy of hotel. Alternatively, a more reliable statistical profile can be obtained through a separate representative survey.

Let us get rid of the immigration card.

Bad investment-linked policies

Most investment linked policies provide a poor return to consumers due to the high charges that are taken away from the savings. Consumers are not aware of this fact. They were told untruths about the projected return and were under the impression that they would get a much higher return than was actually the case. If you have bought an investment-linked policy, you should check the facts here.
http://tankinlian.com/admin/file.aspx?id=680&IID=684

Some investment-linked policies may be acceptable. Do you know the difference? Learn about how to tell the good from the bad policies.

Greater accountability needed for SAF

It is time for National Service to be reviewed as part of the National Conversation
http://www.todayonline.com/Singapore/EDC120918-0000034/Greater-accountability-needed-from-SAF

Modify PSLE

Here is a view from one Member of Parliament
http://www.todayonline.com/Singapore/EDC120918-0000046/MP-echoes-calls-for-PSLE-to-be-scrapped

He asked, "is there an alternative?"

We should use the PSLE to determine who has passed, and who has failed. The passing rate should be 90% or higher. After a person has passed PSLE, he can go to a secondary school near the home, to be decided by ballot. There should not be any good school and bad school. The school is to educate people to be literate, numerate and people of good character. It is not a place for competing to be scholars.

After a few years, we will see a better distribution of students across all schools and the difference between good and bad schools will narrow sharply. All schools will be "good" in their own way - in sports, arts or academia.  It will depend on the talents of the students.

This is my contribution to the National Conversation.

Motor policy covers collision

A slightly edited version of this letter was published in Straits Times today.

15 September 2012

Editor

Forum Page

Straits Times

I agree with the views expressed by Abbas Vakharia "Fatal Ferrari crash: 

Insurer's stance cause for consumer concern" ST 15 Sep 2012.

AXA's insurance policy clearly states that it covers the motor vehicle that is

accidentally damaged by the operation of several named perils, including "collision".

I am puzzled by a statement from AXA reported in Today paper that it covered 

only "accidents" and not "collision".

AXA's policy does have a clause, stating that the policy does not cover "any wilful act 

and/or wilful negligence" of the insured or an authorised driver. 

A "wilful act" means that the Ferrari driver intended to collide into the taxi

and even to take his own life. While the driver was reckless, I cannot image that 

he had intended to cause the collision.

I hope that the Insurance Commissioner's office will discuss this issue with AXA and 

clarify if AXA's stand is justified, based on the circumstances. Consumers need to be

assured that insurance companies will act fairly in meeting their obligations. Special attention is required from the regulator, as motor insurance is 

compulsory by law. 

Tan Kin Lian
President
Financial Services Consumer Association

Solve the immediate priorities

Mr. Feed talks about the immediate priorities that needed to be addressed now.
http://feedmetothefish.blogspot.sg/2012/09/nothing-but-cowpeh-cowbu.html

Renewal of motor insurance

If you have been given stiff terms on renewing your motor insurance, take part in this survey.
http://www.surveymonkey.com/s/9HTWPVV

Internet Trolls are harmful

The Australian Government is taking action to crack down on Internet trolls. One troll harassed a victim to the point of depression and near suicide. http://www.straitstimes.com/breaking-news/world/story/aussie-government-crack-down-internet-trolls-20120916

These trolls are "sick" people who enjoy harassing other people needlessly.

Stiff renewal terms for motor insurance

Motor insurance is compulsory. If you do not make any claim, you enjoy a higher discount (up to 50%) on renewal of the insurance.

If you make a claim, you will lose up to 30% from your discount for each claim. For example, if you earned discount is 50% after five years and make a claim, the discount is reduced to 20%.

However, some insurance companies loads the premium in additional to reducing the discount. This is double penalty. It is an unfair practice.

If you have suffered this type of double penalty in the past, please give the particulars in this survey.
http://www.surveymonkey.com/s/9HTWPVV

Wilful negligence

The AXA motor policy exclude liability due to "wilful act" or "wilful negligence". I searched for a definition of "wilful negligence". The nearest is "gross negligence" or "wilful misconduct". It is explained here:
http://www.blakes.com/english/view_disc.asp?ID=114

Third party claim that failed

If you meet with an accident and wish to engage a workshop to make a third party claim, so as to protect your No Claim Discount, you may end up in a bad situation. Read this incident and avoid this stressful situation.
http://tankinlian.com/admin/file.aspx?id=679&IID=682

A few people had met with this bad situation and sought my help. It seemed to be quite common and many motorist had fell into a trap.

Train the mind

If you want to try some computer games that train the mind, especially for children, go to http://www.facebook.com/TanKinLianAssociates

Bad explanation given by AXA

http://www.todayonline.com/Singapore/EDC120905-0000039/Ferrari-crash-was-not-an-accident--AXA

According to this report in Today paper, the insurer of the Ferrari involved in the fatal crash at Bugis took the view that their policy covers "accidents" and not "collision".

I find this statement from AXA to be ridiculous. A motor insurance policy covers damages and losses arising from collision between the insured vehicle and another vehicle or other object. This is the primary cover provided by a motor insurance policy.

AXA Smart Drive policy clearly states its comprehensive cover to be as follows:

"If during the period of insurance, your Motorcar and its original accessories and spare parts are lost or stolen, or are accidentally damaged by the operation of the following perils:

(i) fire, lightning, thunderbolt, explosion, collision

(ii) convulsions of nature, including flood, earthquake, volcanic eruption, hurricane,cyclone,typhoon, windstorm

(iii) self-ignition

(iv) riot, strike and malicious damage.

Collision is clearly stated to be a peril covered by the policy.

Under the "exclusion clause" of the policy, it is stated that the policy does not cover "any wilful act and/or wilful negligence" of the insured or an authorised driver.

"Wilful" is defined as "intent on having one's own way, headstrong or obstinate". AXA has to prove that the Ferrari driver intended to hit the taxi. While he may be driving recklessly, I cannot imagine that he had intended to hit the taxi or to take his own life. 

Learning Chinese

Gilbert Koh gave some tips on learning Chinese or any foreign language. It is enjoyable and effective.
http://mrwangsaysso.blogspot.sg/2012/09/a-singaporean-in-shanghai.html

Wrong for AXA to reject this claim

I met a senior person in AXA. He asked my views about AXA's rejection of the claims arising from the Ferrari crash. I said that the decision of AXA was wrong.

Read this letter in the Straits Times
http://www.straitstimes.com/premium/forum-letters/story/fatal-ferrari-crash-insurers-stance-cause-consumer-concern-20120915

Here are my reasons.

Motor insurance covers collision arising from an accident. The only way for AXA to reject the cover was if the driver had caused the accident intentionally. It would be difficult for AXA to prove this case. So, it is bad for AXA to reject the claim, on the grounds that the driver was reckless.

Component shares of the ST Index

SGX is removing NOL as a component share of the ST Index and replacing it by another share. Normally, when a share is removed from the Index, its price will drop as the index funds (such as the STI ETF) have to sell the shares). The new share that enters the index will see a price rise. I wonder if this will happen in Singapore?  It will be interesting to watch.

Core values or meritocracy?

Meritocracy is a sacred cow that may need to be slaughtered.http://www.todayonline.com/Singapore/EDC120915-0000036/Core-values-or-meritocracy?

FISCA Talk - Priorities @ Retirement

The talk is fully taken up (100 people have registered). We will be arranging another class, tentatively for 20 October. This will be put up separately for registration.
http://easyapps.sg/assn/Org/Event.aspx?id=5

TKL Associate Facebook

"Like" this page and stand a chance to win books by TKL in the contests held each week
http://www.facebook.com/tklassociate

Financial news for consumers

Keep in touch with financial news for consumers in www.fisca.sg (Information).

Removal of Secondary School Banding

Here are some good news.

12 Sep 2012 :: MOE to remove secondary schools banding
http://sg.sg/schbanding

The Ministry of Education (MOE) will abolish the banding of secondary schools by academic results with immediate effect. It will also remove the Masterplan of Awards (MoA) and reduce the number of school awards from 2014. Instead, MOE will place more emphasis on recognising best practices by schools in delivering a well-rounded education. These changes are in line with MOE's efforts to enable every school to be a good school in delivering a student-centric, values-driven education.

Financial Planning Talk for Near Retirees

I am conducting a 3 hour talk on financial planning for people who are
approaching retirement age.

The fee for this talk is usually $30, but it is now provided free as the
cost is sponsored by Singapore Lifestyle Planners.

The topics for this talk is set out in this brochure
http://www.easyapps.sg/assn/FramePDF.aspx?ID=257

Date: 29 September 2012, Saturday
Time: 2 pm to 5 pm
Venue: SMU Administration Building, Function Room 4.1

If you are interested to attend the talk, please register early here:
http://easyapps.sg/assn/Org/Event.aspx?id=5

The advertisement for this talk will appear in the Straits Times this Friday
and also STclassifieds.sg, so I like to tell you about it earlier before it goes
public, in case you are interested to attend. .

Cheaper at Changi Airport

I visited Guardian Pharmacy at the airport, after passing through immigration. I asked the staff, "are your prices here higher than the shops outside the airport?". He replied, "We charge the same price here in all our outlets. At Changi Airport, we do not charge GST, so you get it cheaper here."

Give the same entitlement to all

I dislike the approach used by the Government to "differentiate" Singaporeans in getting different entitlements to the GST Vouchers and other top-ups based on arbitrary criteria and cutoff points. It does cause difficulty when some people felt that they have been "differentiated" unfairly.  Read this report
http://www.todayonline.com/Voices/EDC120911-0000178/GST-Voucher-criteria-aimed-to-be-fair,-practical

I prefer that approach adopted in Hong Kong where every citizen gets the same amount, regardless of their income level, age or type of house they live in. Hong Kong did not try to "differentiate" and "calibrate". They adopted a simple and fair method of giving the benefits.

Of course, the Hong Kong method gives the billionaire the same benefit as a pauper. Why begrudge the billionaire,who does pay a thousand of times more in tax anyway, and will probably donate this small entitlement to charity. By trying to "differentiate" the rich from the poor, there are many people who fell on the wrong side of the calibration and felt unfairly treated.

Yields on Singapore Government Securities

Based on new issues in 2012
http://tankinlian.com/admin/file.aspx?id=675&IID=678

Based on current prices traded on SGX
http://tankinlian.com/admin/file.aspx?id=676&IID=679

Shortage of manpower

I was at the check-in gate at Changi Airport 80 minutes before departure. The gate was supposed to open at that time. It did not. The security staff, under Certis, were chatting away. A long queue of passengers had formed. After 10 minutes, the security staff beckoned the passenger to proceed for security clearance.

I asked the security staff why they started the clearance 10 minutes after the scheduled time. He said, "shortage of manpower".

This answer is not acceptable to me. We have many Singaporeans who are unemployed. Why can't Certis employ them to meet the manpower shortage? They must be keen to make a profit on their contract, rather to spend more on manpower. As a results, the customer service deteriorated.

This is the consequence of the cost cutting, outsourcing practice of our government and quasi-government agencies. By being short-sighted, they have created a deterioration of service standard. Nobody seem to care about this deteriorating situation. (This is not the first time, as I had experienced a similar delay on my previous trip.

I hope that our government leaders are reading this post.

Survey results

Which government policy should be changed?
http://tankinlian.com/admin/file.aspx?id=677&IID=680

Should we offer discounted HDB flats?
http://tankinlian.com/admin/file.aspx?id=678&IID=681

Exorbitant payments for third party claims

Some motorists were surprised to learn about the large sums paid by their insurers for third party claims. In some cases, the third parties were also at fault, but the insurer paid anyway. In many cases, the amounts paid were exorbitant, e.g. $5000 or $10,000 for a minor damage. The high payments lead to high premium rates and loading on renewal.
Have you experienced this yourself or know of friends who suffered this fate? Share your views here. 

National Conversation - a new name to an old practice

We seem to be having conversation with the people after every general election. I have lost how many times, we had this type of conversation. It is a big effort and usually ends up with the same strategy. We do have nice sounding slogans, such as the "shared values" and the "Swiss standard of living" generated in previous exercises.

http://www.todayonline.com/Singapore/EDC120909-0000043/Key-challenge-of-Spore-conversation-is-managing-expectations--PM-Lee

Why does Singapore need to have this type of exercise? I do not see other countries putting in similar efforts. Well, here is the answer!

In other countries, there are active debates in Parliament. They hold their national conversations all the time in their legislature. Why can't Singapore follow the same approach, and have a more active Parliament?

Stop wasting money and time

5 September 2012 

Editor, Forum Page

Straits Times

Each year, i received envelopes marked "Important, need immediate attention" from 

several listed companies. It contain an option to receive the dividend in script. 

I do not intend to use this option and do not wish to be bothered by this invitation. There is 

no place in the option form for me to "unsubscribe" to this invitation.

I hope that Singapore Exchange will ask the listed companies not to waste money and 

time to send this invitation repeatedly to shareholders who do not have any 

interest to subscribe for further shares. 

The listed companies should ask their shareholders if they wish to opt in for this exercise, 

or give them an option to opt out.

Tan Kin Lian

Results of survey - Affordable HDB flats

87% of Singaporeans express support for a new category of HDB flats that are sold at a 30% discount, but have to be sold back to HDB. Half o the 49 respondents are existing HDB flat owners. Only 20% express "big concern" over the impact on the price of existing HDB flats. 

http://tankinlian.com/FramePDF.aspx?ID=678

Results of Survey on Government Policies

In this survey, 38 people replied on what they like to see as changes in government policy. The results are quite surprising.
http://tankinlian.com/FramePDF.aspx?ID=677

Price of HDB flats

A HDB maisonette in Bishan sold was sold for nearly $1 million.
http://www.tremeritus.com/2012/09/08/bishan-maisonette-sold-for-record-980k-bought-by-new-citizen-and-her-prc-father/

This should be a personal matter between the buyer, who can afford to pay the price, and the seller, who  pockets a hefty capital gain. It should not bother the rest of the people, IF our government has adopted the correct economic policy.

The flaw is in our government policy to link the price of new HDB flats to the resale market. This bad policy can be changed. And, if it is changed, things will be so much better.

Let us see what should be a better policy. If the Government prices new HDB flats based on the mean income of the citizens, and a new 4 room flat cost say $250,000, it should more than meet the cost of construction and land (based on its holding cost). The public would be able to afford these flats and would be happy if the sellers can fetch a high price!

I call on the Government to adopt a new approach to price new HDB flats.

Health care cost in Hong Kong

The health care cost in Hong Kong for the elderly is affordable, unlike Singapore. Read this article.
http://www.tremeritus.com/2012/09/08/hongkies-are-enjoying-the-longest-life-span-in-the-world-ever-wonder-why/

Three decades ago, the cost in Singapore was also affordable, and that was before the Government decided to restructure the hospitals. We have the choice to go back to the old system. If you agree, share your views here. We will find a way to tell the Government.

But, the Government is worried about the high cost of health care and the demand for health care from elderly people. Perhaps, they should be brave to tell people,  “When you are above 80, and it is time to die, no amount of medical care can cure you. It doesn’t matter if you are in Ward B2 or in a private hospital. Say your last goodbyes and leave your children with a fortune, instead of wiping out their savings.”  Quote from Jeremy Ko's blog.

http://www.jeremyko.com/2012/09/two-finance-talks-two-different-approaches/

Who needs financial help

Acting Minister Chan said that "society must agree on who should receive social help." But he did not state who is "society". In democratic countries, the issues are debated in Parliament and in the media. But, unfortunately, these debates are not actively done in Singapore. We need to change our democratic processes.

http://www.tremeritus.com/2012/09/08/chan-chun-seng-society-must-agree-on-who-should-receive-social-help/

Survey

Please take part in these surveys

Changes in Government Policies
http://www.surveymonkey.com/s/MKJZY73

Make HDB flats more afforable
http://www.surveymonkey.com/s/5NTBZXL

E-government services

The headline in Today's paper seems misleading. The actual ranking of Singapore in the use of the internet, in economic, social and political impact, is surprising low.
http://www.todayonline.com/Singapore/EDC120908-0000033/E-govt-services-put-Singapore-at-No-1

Although the Government scores reasonably well in providing information to the public through the internet, the actual process of submitting information to the government agencies is the exact opposite. It is difficult, painful and time wasting to submit returns to various agencies. The websites are too complicated to navigate. I have given my feedback to the government agencies on countless occasions.

Just as an example. Recently, I paid a fine of $120 to submit a return late to ACRA through the internet. I learned that ACRA collected $17.1 million in penalites in 2001 from late submissions. This means that 145,000 people submitted late!

If our e-government services is easy, efficient and No.1, why do 145,000 people find it difficult to comply with the requirements to file their returns?

The Missing Singaporeans

Some employers said that they are willing to employ Singaporeans, but they cannot find them, even at higher salaries. There seems to be a shortage of Singaporeans for the economy.

I want to share the key factors for the missing Singaporeans.

The shortage of Singaporeans is a fact. Look at our declining birth rates for the last 25 years and you will agree that numerically, the supply of Singaporeans for the economy has diminished. The Government's attempts to reverse the birth rate through its "three or more, if you can afford it" has failed miserably, and the birthrate had continued to decline relentlessly.

The other factors are that many Singaporeans are spending too much time in National Service (here, I refer to the males) and going to universities.

Recently, I asked a Poly student what he thought about "National Service". He said, "wasting time". He explained that he is already 19 years and will complete National Service by 22 and will only start work at 26, after completing university. His classmate said that she will go to an university outside of Singapore, as she would not be able to qualify for a local university. She would only start work at 23.

Forty five years ago, I started work at 18 after completing Secondary Four. More than 80% of my cohort started work around that time - as only 20% went to college and university. We were trained in our jobs at the workplace and fitted well. We did not need to have any degree in "business management" or "marketing" to do the clerical, executive, sales or service work that were needed by business. We learned on the job, and the learning was more relevant!

Today, far too many people are spending their time in universities, either in Singapore or overseas, learning knowledge that they will not apply in their future work. For example, we have many qualified engineers  making more money as insurance and property agents or financial traders. If we want them to do these vocational jobs, why do they have to spend four years in university?

 Our local people have to compete with foreigners who hold university degrees. Many of these foreign degrees are given out quite liberally, with the result that the holders do not match the degrees. Many Singaporeans pursuing overseas degrees in low grade universities be in a similar situation. Why spend so much time and money on these useless qualifications? At least, the foreigners spend a fraction of the cost spend by Singaporeans on getting these papers.

One key factor for this "paper chase" is the refusal by the Government to implement a minimum wage in Singapore. There is also a culture of blind adherence to salary grades based on paper qualifications. Many people pursue a degree, even a useless one, in the hope that they can qualify for the higher salary band. It is sad to see human resource managers over-rely on paper qualifications, rather than judgment on work performance, in fixing salaries.

We have to re-think our approach towards paper qualifications and spend our time and money more wisely to produce people that can fit the real needs of business and industry.

Tan Kin Lian

Be prudent in buying a home

Not published

6 August 2012 

Editor, Voices

Today Paper

I agree with the Minister for National Development Mr Khaw Boon Wan

that Singaporeans should be prudent and avoid buying an expensive property 

on a long term mortgage loan, such as the 

50 year loan that is introduced recently by a local bank.

I urge the Minister to review the practice of pricing HDB flats and  

the financing terms offered by the Housing and Development Board and their

partner banks.

Many Singaporeans are paying for their HDB flats on loans that stretch to 

30 years and require the income of both spouses to service the loans. 

Can these working people be sure that both of them can maintain their current jobs 

and earning capacity over a long period?

The mortgage payments may appear to be affordable under the 

low interest rate of 2.6% per annum. The current low interest 

environment cannot continue forever. The mortgage payment will increase by a 

hefty 26% when the interest rate is increased to (say) 4.5%, which is more 

compatible with the prevailing inflation rate.

Recently, the Canadian government took the step to limit mortgage loans to 

25 years to combat the bubble in property prices. I suggest that HDB should 

follow this prudent example, and keep the prices of HDB prices at an 

affordable level, representing not more than four years of the average combined 

family income. 

Tan Kin Lian

Yields on Signapore Government Securities - SGX

Here are the yields on Singapore Government Securities based on the prices quoted on Singapore Exchange (SGX).

The liquidity is low and the yield is low. The yield on a bond with more than 29 years remaining tenure is only 2.282%.

http://tankinlian.com/Admin/File.aspx?ID=676&Frame=1

Cyber crime

I suggest that those who are concerned with hacking, impersonation and other types of cyber crimes point out that these are criminal activities and the perpetrators can be sent to jail.
http://www.todayonline.com/Singapore/EDC120906-0000110/Cycbercrime-results-in-S$1,18-billion-loss-to-individuals-in-Spore

The best way to prevent crime is to make clear that is is a criminal activity and for law enforcers to be prepared to take action.

Unpopular but prudent measures

Read this article and participate in this survey
http://www.surveymonkey.com/s/MKJZY73

Singaporeans should be smarter to avoid falling into labels such as "unpopular but prudent measures". This was a question asked to DPM Tharman at the dialogue in Nanyang Technological University.

http://www.todayonline.com/Singapore/EDC120906-0000001/Avoid-polarisation-in-politics--DPM-Tharman

A measure is unpopular when it is rejected by many people. But, what makes it prudent? Is it prudent to collect taxes that the people cannot afford to bear, such as GST? Is it prudent to allow too many immigrants that strain the infrastructure and compete with locals for jobs? Is it prudent to allow public housing prices to rise beyond the reach of the ordinary people?

The outcome of these "unpopular but prudent policies" is a wide income gap, an extremely low birth rate and a stressful life.

So, what is prudent and what is not prudent?

What should alternative policies be labelled as "populist"? What can't it be described as "popular"? Remember, "popular" means that it is what many sensible people consider to be suitable for society. What is wrong about letting the common people decide their future?

Here is the definition of "populist" as taken from Wikipedia:

Populist may refer to "a supporter of Populism, a political philosophy urging social and political system change that favors "the people" over "the elites", or favors the common people over the rich and wealthy business owners." ....

So, it seemed to be quite respectable and honorable to be "populist" which is the opposite of "elitist".

I would have preferred DPM Tharman to answer this question along the following lines ... "We should not give labels to certain policies as being prudent and other as being imprudent. Let us have an open mind and see which policies are suitable for our society. We can trust the ordinary Singaporeans to make a collective judgement on what is necessary and right ...."

I agree many of the other answers given by DPM Tharman at the dialogue. He does have an open mind. But he should be careful about being locked into outmoded concepts of "prudent" and "imprudent".

US economy during the past 4 years

This article, and the useful charts, showed the progress of the US economy during the four years of the Obama Administration.
http://www.cnbc.com/id/48911596/

Yield on Singapore Government Securities

The yield on Singapore Government Securities based on new issues in 2012 are quite low, below the rate of inflation. The term to maturity maturity vary from 1 to 30 years.
http://tankinlian.com/admin/file.aspx?id=675&IID=678

Dividend yields on blue chip shares

Which blue chip shares give the highest dividend yield? Find out here. http://tankinlian.com/admin/file.aspx?id=674&IID=677

Honesty and truth matters

Listen to Michelle Obama - a great speaker!
http://video.foxnews.com/v/1823255951001/

New Lumia

Microsoft and Nokia are pinning their hopes on the new Lumia. Wish them the best of success!
http://www.todayonline.com/Technology/EDC120905-0000094/Microsoft,-Nokia-pin-hopes-on-new-Lumia-as-mobile-war-escalates

My guess is that the Microsoft Surface tablet will be a bigger winner!

One Term More

With best wishes to President Obama on his re-election.
http://www.onetermmore.com/video_subtitles.html

The Obama team describe this video as a "political parody".

A parody is an imitative work created to mock, comment on or trivialise an original work, its subject, author, style, or some other target, by means of humorous, satiric or ironic imitation. 

Diversification outside of Singapore

What is a good way to diversify investments beyond Singapore. You will be surprised to learn that the STI exchange traded fund (ETF) offer this opportunity. Read about it in the FISCA website, www.fisca.sg (Information).

Not published.
September 2012

Editor, Forum Page

Straits Times

I agree with the views expressed by Lisa Latip ("Proper childhood? Mum faces challenge, ST 1 Sep).

Although I belong to one generation before her, I also wanted my three children to enjoy their childhood. But, 

they had to struggle with demands of the school system and also need to attend 

enrichment and tuition classes.

The root of the problem is the high standard of the school syllabus set by the Ministry of Education. Twenty years ago, I saw a Maths problem in a Primary 4 textbook that I recalled learning in Secondary 1 during my time. I do not know if the standard had since been increased further!

The high standard did not seem to produce a better quality of people that leave our schools. We need people

who are educated, broad minded, confident in solving problems and are guided by moral, ethical and 

social values. Our highly stressed education system did not seem to produce this kind of people, 

even among those that did well in the system.

We should also ask if we want to continue with a competitive education system to produce

scholars at a young age. 

The alternative is a system that produces educated people who are confident of their

place in society. The top leaders should be identified after they had worked for many years in 

society.

I hope that the Minister for Education, who is now heading the National Conversation, can change the 

education system go give back the childhood to our children.

Tan Kin Lian

Survey on Affordable Housing

Take part in this survey
http://tankinlian.blogspot.sg/2012/09/affordable-housing-top-priority.html

Inconsiderate bureaucrats

Our inconsiderate bureaucrats continue to impose an unfair burden on the small employers. My issue is time is with the SAF.

My staff went for in-camp training. He submitted a claim for NS makeup pay. I received an e-mail from SAF asking me to verify his claim. I click the link and had to enter my SingPass. This was not recognized. I was then asked to call the SAF hotline 1800 3676767.

This is supposed to be a hotline. It is an infuriating line. I went to an automated voice response system asking me all kinds of questions that I do not know how to answer. I tried to guess the button to push and there are more buttons to come. I finally got lost, after wasting much time.

I replied to the e-mail and once again was asked to call the SAF hotline. I tried again and after refusing to press a button 3 times, they asked me to press 0 to talk to a human being.

I pressed 0 and got a message that all the customer service officers are busy.

Why does the SAF need to waste so much of my time? How inconsiderate can they be?

Useful role for financial advisers

There are 15,000 financial advisers (or insurance agents) in Singapore. They make a living by selling life insurance policies and earn a commission on the sales.

It is all right to earn commission on products that benefit the consumers. Unfortunately, many of the products currently marketed as "investment products" give a poor return for their long term savings of the consumers.

The solution is for insurance companies to design "investment products" that give good value to consumers. The insurance agents can earn a  commission by selling these products, and the customer still benefits.

In my view, the "investment type" products should give insurance protection and offer a long term yield of 4% per annum. This yield is possible by investing in the right long term assets and keeping expenses, including commission, at a modest level. This yield will give a modest real return above the long term rate of inflation (2% to 3%). It is possible to create a product that meets this criteria, and offer it for financial advisers to sell to the consumers. This will be a win-win solution.

The financial advisers can also offer advice on financial planning, budgeting, debt management and early withdrawal of CPF, for an appropriate fee, say $50 to $100 an hour. This type of advice is suitable for the individuals and help them in a positive way.

For debt-management or early CPF withdrawal, the fee can be fixed at $200 with a 70% subsidy to be provided from government funding. The consumer pays $60 and the financial adviser earns $200, with $140 funded by the government.

It will help financial advisers to move to a new platform of giving fee-based advice, and can help them to make a living appropriate to the time that they have spent to acquire the financial advisory knowledge.

Dangers of the Three Tier Agency System

Life insurance is sold in Singapore, in most cases, through a three tier agency system.  I want to share my concern about the three tier agency system, and what is the real problem that many people may not realize. I did not realize it myself until recently.

Under the three tier system, you have an agency manager who supervises unit manager who recruits the agents. 

The agents earn a commission on selling the life insurance policies. The unit managers earn an overriding commission, say 30% of what the agent earns, and the agency manager earns an overriding commission, say 15% of all the commissions earned by all the agents in the agency. 

On the surface, this type of systems looks quite acceptable. After all, there is the cost of recruitment, supervision and training - and they have to be met by the insurance company. The payment of over-riding commission, which is tied to actual sales, looks like an efficient system.

Now, here is the danger!

Many of the agents are young people, most probably graduates or even undergraduates from polytechnics or universities.They are trained to pass the examinations and then on the "positive features" of the products that are being sold. 

Some are even told lies about the products, e.g. that the investment linked products can earn a yield of 9% and is better than other types of investments. They are also told that this yield is possible because the insurance company is able to manage the funds to earn this type of return. The net yield, after using a more realistic projection and allowing for the high deductions, is probably 3% or less. 

These new agents, being naive, goes to tell their friends how wonderful these products are! In some cases, the agents knowingly tell a lie to clinch the sale, but it is also quite likely that most the agents believed what they were told and honestly sold the products in the belief!

It may take the agents a year or two to realize that they were making the wrong statements. They then drop out of the business. This accounts for the high attrition rate. 

The agency managers and unit managers take over the business abandoned by the agents and continue to recruit the next batch of agents. 

This type of business model has been operating for decades. I did not realize earlier that it could be the umbrella for the massive mis-selling, using innocent young people to tell the lies to get customers to buy the life insurance policies.

Remember, it is difficult for the experienced agency manager to tell lies directly to his or her own clients. It is easier to train a young recruit to tell the lies. If this is found out, it is easy to wash off the blame by saying that the new agent has mis-understood the terms of the contract. 

This type of mis-selling is now easier with the sale through the bank channels. The bank staff are told by the insurance agency manager on what to "sell" to the customer. I have come across many cases of consumers who were given  incorrect information.

I wish to clarify that the above statement does not apply to all agents. It may be possible that most agents and agency managers practice the trade ethically, and it may apply only to a small number. But, we do not really know how big is this proportion of mis-selling, and what portion is deliberate mis-selling. 

I honestly do not know why it is necessary, in the year 2012, to continue this mode of selling life insurance  through three tiers and for life insurance companies to continue paying high commissions on these policies sold to unwary consumers. 

The road to citizenship

Here is a good article to explain two different approaches to citizenship.
http://www.tremeritus.com/2012/09/04/the-road-to-citizenship-singapore-versus-switzerland/

Two approaches in financial planning

Hi Mr Tan

Let me refer you to a blog posting I came across. The writer attended 2 talks, one of them its held by you.

I think its apparent which talk gave better value. You might want to put this on your website. 

Note: I am not related to the writer, I just think its a good endorsement of your work.

http://www.jeremyko.com/2012/09/two-finance-talks-two-different-approaches/ \

Will or nomination?

Dear Mr. Tan,

I have a will that distributes half of my estate to my wife and the other half to my parents. I have an insurance policy that nominates my wife to receive 100% of the proceeds.

When I die, how will the proceeds of my insurance policy be paid?

REPLY

My understanding is that the nomination is more specific and it takes precedence over the will. However, i will post your question in my blog and see if a legal expert can comment on it.

Make it easy for business to make electronic payments

28 August 2012

Editor, Voices
New Paper

In spite of the availability of electronic banking, many businesses

are still making payment using checks. I read a report that
91 million checks were cleared in Singapore in 2000. This number 

is likely to be higher today.

Why are so many checks being used, when there are
more efficient ways to make payments, e.g. through
electronic banking.

It probably cost businesses a few dollars to process each check, considering
the manual work that has to be done by accounting staff in the paying and receiving 

companies and their respective banks. 

I have tried to make electronic payments for my business transactions and
found the process to be difficult and error prone. After the disappointments, I have decided
to go back to writing checks.

Can the Monetary Authority of Singapore and the Association of Banks in Singapore
look at how to make it easier for business entities to make electronic payments and to
promote its usage?

Tan Kin Lian
Director
Tan Kin Lian & Associates Pte Ltd