LAST year, close to half of the complaints received by the Monetary Authority of Singapore (MAS) against life insurers were related to service standards, prompting the regulator to urge insurers to raise service quality to meet consumers' expectations.
Chua Kim Leng, assistant managing director of the banking and insurance division at MAS, made the point at the Life Insurance Association Singapore's annual luncheon on Wednesday, adding that the association should regularly review its code of practice "to ensure it remains relevant and helps raise standards".
While details and the nature of the complaints were not made available, Mr Chua said that insurers should adopt the code and be fair, proactive and prompt when dealing with consumers. He added that on the advisory process, "there continues to be complaints on mis-selling due to poor advice or misinformation".
He said that insurers should review their sales process and consider ways to provide appropriate and sound advice, and communicate more effectively with customers.
"Take, for example, participating (par) funds, there is room for insurers to strengthen disclosure on par fund management, bonus determination and the basis for illustration rates," Mr Chua pointed out.
He went on to say that with greater transparency and disclosure, insurers can better assure customers that they are being offered quality products and are being treated fairly.
On a broader theme, the regulator stressed that it was imperative for insurers to have effective governance and a sound risk culture, particularly as the environment becomes more challenging.
Said Mr Chua: "A sound and well-permeated risk culture serves as a compass to guide an organisation's people and decision-making. We know that today's undesirable practices and behaviours could be the root of tomorrow's problems.
"MAS will therefore continue to look to the board of directors to set the tone at the top, perform the stewardship role and exercise effective oversight, in order to safeguard stakeholders' interests and in particular, policyholders' interests."
Given that insurance will be one of the sectors most disrupted by technology, Mr Chua encouraged firms to embrace technology and innovation, which would drive product development.
Touching on the changes to the existing risk-based capital framework, or commonly referred to as RBC2, he said that the quantitative impact study and public consultation would be conducted in the second quarter.
On the same day, LIA re-elected Khoo Kah Siang as president and Ken Ng as deputy president. The duo will be extending their tenure in their respective roles for a third straight year. They were joined by Philip Seah, who was elected deputy president and would serve in his new role with immediate effect.
Dr Khoo also gave an update on LIA's review of the benefit illustration (BI) for par products, which is expected to be wrapped up this year. An area that LIA is looking into is whether to provide bonus history in the BI.
This article was first published on March 10, 2016.
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