Insurance agents warned against taking medical referral fee

Singapore - The practice of insurance agents getting a fee for referring patients to either doctors or medical concierges has triggered a warning from the Life Insurance Association Singapore (LIA Singapore).

Industry sources told The Business Times that an advisory against such practice, which has gained ground, was released to LIA members a few months ago.

In response to queries, the association's executive director Pauline Lim said LIA was of the view that such arrangements are not ethical and should not be pursued.

Without giving any details such as the number of cases the association has been alerted to, she said that "our members have been advised of the association's view accordingly".

She did, however, point out that if such practices add another layer to healthcare costs in Singapore, it would further escalate rising costs, which would be contrary to LIA's efforts to address and mitigate the situation through collaboration with other stakeholders from the healthcare industry and the authorities.

Checks by BT found two known cases.

At least two AIA agents had called up The Medical Concierge Group (TMCG) earlier this year to negotiate deals to refer patients to its doctors, in return for a cash fee that was a percentage of the patient's medical bill - a common practice for referring patients to doctors.

Daniel Choo, chief executive of TMCG, a fixed fee medical concierge, said that he turned the two agents away before the conversation could get any further.

At least two doctors have been blacklisted by the group for trying to entice TMCG staff into referring patients to them, he said, adding that such fee arrangements could go as high as 30 per cent of a referred patient's medical bill.

AIA Singapore said in a statement that it was opposed to and did not condone the practice of introducing policyholders to medical specialists for a referral fee.

"All AIA financial services consultants (FSCs) and financial advisory partners are disallowed from engaging in such business practices, and we expect all representatives to abide by and uphold the code of ethics and professionalism set. This is a serious matter and swift action will be taken against any individual found upon investigations to be involved in such unethical business practices."

At Prudential, when asked if there were explicit company policies in place addressing such conduct, a spokeswoman said that the insurer had "an existing policy that does not allow its financial consultants to work with third-party administrators resulting in consumers taking on higher healthcare costs unnecessarily" and that it reviews "appropriate disciplinary actions on a case-by-case basis".

Likewise, Aviva, Income and Great Eastern Life have all said that they do not condone such practices, while AXA Life declined comment when queried.

Income said that it has reiterated to all its advisers that such practices are unethical, while Great Eastern said that there has not been any such case and that it would not hesitate to take "strict disciplinary action against errant representatives".

Just like how healthcare agents get a cut for referring medical tourists to doctors, similar transactions involving insurance agents are within the boundaries of the law, an industry veteran pointed out.

The trend had "surfaced sporadically in the mid-2000s" but has now become more prevalent, he said, adding that only a small group of agents or advisers do so in the wider industry.

This group is typically made up of those who deal with foreigners or medical tourists, although observers noted that in recent times, such transactions have spilled over into the area of IP and IP rider policyholders.

Said Ms Lim: "LIA Singapore's priority is to ensure that policyholders' interests are managed with utmost integrity and that representatives of the life insurance industry conduct themselves with professionalism at all times."

This article was first published on October 25, 2016.
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