Dear Mr. Tan,
Thank you for your explanation about the anticipated endowment policy. Based on your example, the policyholder is worse off, as he has to pay an additional premium and get back only a part of it (after deducting expenses) as the annual cash benefit.
MAS has published guidelines on the fair treatment of policyholders. In your opinion, will the board and senior management get into trouble by selling this type of product, as the policyholder appears to be worse off?
What about the insurance advisers who sell this type of product? Are they in breach of their duty to give good advice?
REPLY
In my view, it will be difficult for the board, senior management or insurance adviser to explain how this product is better for customers, compared to an ordinary endowment policy.
In the past, insurance companies have the leeway to design products that are pay high commission for agents, make good profit for their shareholders, but give poor value to the policyholders. This may change with the new MAS requirement.
This is just my guess. I do not know how MAS intends to implement the new regulations. We have to wait and see the future developments.
Tuesday, February 26, 2008
Bahrain
Bahrain has a population of 800,000. It is an island nation, slightly bigger than Singapore in physical size. The capital is Manana. The cost of living is high. Taxi and hotel fares are about 150% to 200% of similar prices in Singapore.
Dubai Airport
I transit through Dubai Airport before morning on the way to and from Bahrain. On both occasions, Dubai Airport is packed. It is more than twice as busy as Changi Airport. Many of the passengers had to sit on the floor, as the chairs are all taken.
Many people use Dubai Airport to transit to other cities in the Middle East. They go to work in the booming Middle East couniires. Thanks to the high oil price and the new found wealth.
Many people use Dubai Airport to transit to other cities in the Middle East. They go to work in the booming Middle East couniires. Thanks to the high oil price and the new found wealth.
Loss of No Claim Discount
Dear Mr. Tan,
Last year, my insurance company settled a third party claim without my consent. They penalised me on my No Claim Discount. I find this to be unfair. How can I take up this matter?
REPLY
The No Claim Discount is given only if the insurance company did not pay any claim during the past year. If there is a third party claim, the insurance contract specify that the NCD will be lost.
The only way to keep the NCD is for you to pay the claim from the third party. You can ask your insurance company about the amount of the claim, and decide if you wish to bear it.
The insurance company will protect the interest of its policyholder. They will reject the third party claim if their own policyholder is not liable. They will only pay the third party claim if, based on the circumstance of the accident, their policyholder is likely to be at fault. They use standard market protocol to determine the party at fault.
If you feel strongly against the payment, you can ask the mangement to review their claim and see if they have paid the third party claim wrongly. After the review, you have to take their decision as final.
Last year, my insurance company settled a third party claim without my consent. They penalised me on my No Claim Discount. I find this to be unfair. How can I take up this matter?
REPLY
The No Claim Discount is given only if the insurance company did not pay any claim during the past year. If there is a third party claim, the insurance contract specify that the NCD will be lost.
The only way to keep the NCD is for you to pay the claim from the third party. You can ask your insurance company about the amount of the claim, and decide if you wish to bear it.
The insurance company will protect the interest of its policyholder. They will reject the third party claim if their own policyholder is not liable. They will only pay the third party claim if, based on the circumstance of the accident, their policyholder is likely to be at fault. They use standard market protocol to determine the party at fault.
If you feel strongly against the payment, you can ask the mangement to review their claim and see if they have paid the third party claim wrongly. After the review, you have to take their decision as final.
Expertise in claim settlement
Insurance performs two important functions:
a) Pay for cost of claims
b) Handle the settlement of the claims
The insurance company should have expertise on the following:
a) The best source for treating a sickness
b) Quality and cost effectiveness in handling a repair
c) Determining the party who is liable for the accident
A lay person will find it difficult to handle these matters, as they encounter it only rarely. The claims officer handle claims every day and is able to build up an expertise in dealing with these matters efficiently.
If you have to make a claim for motor repair, medical treatment or determine liability, it is better to report immediate to the insurance company and let the claims officer handle this matter for you.
It is also important for the insurance company to have claim officers who are competent in handling these matters, insted of depending only on paperwork.
Tip: Leave the specialised matters to the experts.
a) Pay for cost of claims
b) Handle the settlement of the claims
The insurance company should have expertise on the following:
a) The best source for treating a sickness
b) Quality and cost effectiveness in handling a repair
c) Determining the party who is liable for the accident
A lay person will find it difficult to handle these matters, as they encounter it only rarely. The claims officer handle claims every day and is able to build up an expertise in dealing with these matters efficiently.
If you have to make a claim for motor repair, medical treatment or determine liability, it is better to report immediate to the insurance company and let the claims officer handle this matter for you.
It is also important for the insurance company to have claim officers who are competent in handling these matters, insted of depending only on paperwork.
Tip: Leave the specialised matters to the experts.
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