MAS seeks feedback on the proposed Policy Owners' Protection Scheme enhancement
The central bank plans to enhance the scheme’s coverage amongst others.
The Monetary Authority of Singapore (MAS) has invited the public to provide feedback on the proposed changes to the Policy Owners' Protection Scheme.
MAS plans to enhance the coverage, design, and operational efficacy of the scheme.
Under the proposal, MAS wants the scheme to cover mandatory third-party liability insurance under the Active Mobility Act 2017 that businesses purchase for specified mobility devices such as bicycles, personal mobility devices, power-assisted bicycles, motorised wheelchairs or mobility scooters.
The central bank also wants the scheme to cover personal travel insurance policies issued to corporates as the policy owners where payouts are due to individual travellers.
MAS will also specify a list of benefits covered and not covered under the scheme for the various personal line insurance.
“Direct general insurers which are members of the scheme will be required to clearly state the benefits that are not covered in their policy documents,” MAS said.
To ensure that all claims are paid expeditiously, MAS also proposed to extend scheme coverage to claim events, except surrenders, that occur even after the failed insurer has been put in the hands of liquidators.
“This will minimise disruption to consumers as liquidators explore options to ensure continuity of the protected life insurance policies, such as looking for buyers or setting up a new company to take over these policies,” MAS stated.
To simplify the scheme’s design, MAS proposed a standardised methodology for calculating refunds of unused premiums for protected general insurance policies, which can be used by policy owners to find alternative cover.
MAS is also proposing a simpler methodology for computing the maximum benefits that are protected under the scheme for the applicable whole life, endowment and term policies.
The simplified methodology will rely on the aggregate guaranteed death benefits alone and ensure that policy owners, who currently have total guaranteed death benefits of up to $500,0003 per life assured, would not have their aggregate death benefits scaled down, which could be a possible outcome under the current methodology.
Meanwhile, MAS said it has worked closely with the Singapore Deposit Insurance Corporation Limited (SDIC) to improve the processes needed to operationalise scheme payouts if an insurer fails.
Interested parties may provide feedback on these amendments until 16 February 2024.