Onus must be on insurers to carefully explain terms and conditions of policies and avoid exploiting the vulnerable

Written by Ng E-Jay
20 March 2013

The onus must fall on insurers to carefully explain the terms and conditions of their policies, so that policy-holders or their dependents do not suffer unnecessary financial hardship as a result of being misled or being misinformed.

This is especially so if the insurer is a state-run corporation like NTUC which essentially has a blank cheque from the government to implement nation-wide schemes like the Dependent Protection Scheme (DPS).

When bread-winners of families or other providers are unable to work due to illness or meet with demise, families have to depend on insurance policies to tide them over the rough times. This is hardly the moment for insurance companies to exploit loopholes in existing policies or rely on misinformation to get away from their contractual obligations.

The Monetary Authority of Singapore (MAS) has, over the years, implemented tougher measures to ensure that insurance agents and salespeople do not mis-sell policies, and that the needs of clients are taken into account.

However, the MAS has done little to ensure a level playing field for both consumers and insurers, or ensure that insurance companies do not create products that are skewed against the weak and vulnerable.

To this day, insurers routinely exclude pre-existing conditions from medical policies, leaving families financially strapped when a loved one falls prey to an illness that the insurer refuses to cover.

Some insurance companies also exclude non-routine high cost treatments from their medical policies. How is this fair to the consumer? These companies are exploiting and betraying the trust that consumers have placed in them.

This is where the MAS can step in and enforce tougher regulations to prevent companies from creating and exploiting loopholes in policies that leave their clients financially vulnerable.

How can we call ourselves a financial hub when MAS is not doing enough to protect the consumer, especially the weak and vulnerable?