6 July, 2015
The Monetary Authority of Singapore (“MAS”) issued a Consultation Paper for the Review of Accident and Health Regulatory Framework (“Consultation Paper”). It proposes changes to the regulatory framework for accident and health (“A&H”) insurance to take into account, among other things, the introduction of Medisave-approved Integrated Shield Plans (“Integrated Plans”) and the recommendations of the MediShield Life Review Committee (“MLRC”). The MAS is targeting to effect the amendments by the last quarterof 2015. The table below draws your attention to some of the proposals made in the Consultation Paper.
|Integrated Plans||Other A&H Policies|
|Name of Policy||—||The MLRC noted feedback from the public that consumers were not aware of what their Integrated Plans covered and the distinction between MediShield and Integrated Plans.
To avoid confusion, the MAS is proposing to restrict the use of the term “Shield”:
|Enhanced Disclosure Requirements||The MAS also noted complaints that many policyholders were unaware of the risks of upgrading or switching their policies.
Some of the additional disclosures required are as follows:
|For long-term A&H policies, A&H insurance intermediaries must disclose:
Additional disclosures will be required on:
|Standardised Disclosures||Due to the concerns stated above, the MAS will require insurers to adopt standardised disclosures including the following:
|The MAS had noted from complaints received from policyholders that they may not be fully aware that insurers can unilaterally terminate short-term A&H policies.
The MAS will require a standardised disclosure statement in the Product Summary and Premium Notification Letter for shortterm A&H policies that the plans are not guaranteed renewable and that the policyholder may be subject to additional underwriting at renewal.
|Statements on the following to be made in the following documents:
|Review of Documents||Insurance intermediaries are expected to review the documents given to the insured at least annually.|
|Free Look Period||Insurers will be allowed to offer a free look period that is longer than 14 days, which is the current prescribed free look period.|
|Collection of Information||To assist the better assessment of a client’s needs, A&H insurance intermediaries must:
|Marketing||Insurance intermediaries may use only marketing materials approved by the insurer for the Integrated Plans.||For all long-term A&H policies:
|Training||A&H insurance intermediaries selling Integrated Plans must undergo a minimum two hours of training pertaining to MediShield Life and Integrated Plans content annually||—|
|Conduct and Competency||An insurer is responsible for the training, competency, and conduct of intermediaries, regardless whether these intermediaries are tied-agents or otherwise, selling its A&H policies.|
For further information, please contact:
Choon Yuen Hui, Partner, WongPartnership