Be aware of these new insurance rules in Singapore
Do you know exactly when you are supposed to pay your insurance premiums and renew your policies? If you answered ‘no’ you are not alone. In fact, it is not uncommon to have clients contact us, unsure of exactly when they have to renew their plan, pay their premium and what will happen should they miss a renewal date. This is a problem many with insurance in Singapore have faced, which has led to an increasing number of disputes and confusion. Earlier this month the General Insurance Association of Singapore (GIA) announced new rules that clarify the situation and, hopefully, reduce the number of disputes between insurers and clients.
About the new rules
Implemented on September 1, the latest set of rules from the GIA serve as amendments to the Premium Payment Framework (PPF), a framework that governs the insurance industry in Singapore.
This major amendment, which now makes up the PPF, has two broad aims: Firstly, to clarify exactly when insurance premiums are supposed to be paid. The second aim is to reduce the number of disputes that arise from the delay or non-payment of premiums.
In order to achieve these two goals, the new regulation states that all premiums must be paid to either an insurer or intermediary on or before the renewal or start date of coverage. This new law is relevant to all general forms of insurance including:
Let’s say, for example, you are considering purchasing a new motor insurance plan. Like all other types of insurance, you will be able to pick a date at which coverage will start. In order for this new policy to become valid you will now need to pay the premium before this date.
If you do not pay the premium in total by either the start date (for new plans) or renewal date (for existing plans), then your plan may be terminated, meaning you will not have any coverage and benefits will not be payable by the insurer.
According to the media release from the GIA chief executive Derek Teo: “The key point in the revision of the premium framework is about introducing certainty to all the parties involved. It makes it clearer to the general public when their coverage starts and ends. Likewise, it provides greater clarity to the general insurers in the industry. At its core, it removes any source of disputes that could potentially arise.”
The importance of this change
This is an important change all residents in Singapore should be aware of, especially those who have legally mandated insurance coverage like motor insurance. If, for example, you let your policy lapse or do not pay your premium before the renewal date, you will not have coverage for your vehicle. Should you be pulled over, you could be ticketed for driving without insurance. If you are in an accident then the insurer will deny all claims leaving you with costly repairs and possibly legal bills.
The same can be said for health insurance: If you do not pay your renewal premium before the renewal date of your plan, your coverage will lapse. If you get sick after this point then the insurer will not cover any claims.
It’s not just premium payments that have changed, however
While the rules around premium payments and deadlines are now clearer, these weren’t the only changes implemented to the PPF in early September. There were also a number of rules and clarifications implemented that all residents in Singapore should be aware of. The most important being:
- Renewal of existing motor insurance policies: Insurers or intermediaries must now inform clients 30 days prior to the end of their plan – called an expiry date.Like above, if the premium is not paid, the insurer will not have to pay out on any subsequent claims.
- Purchase of insurance online or through AXS: Coverage for plans made either online or through AXS machines is now effective as soon as the payment is successfully made. If payment is declined e.g., you have reached your credit limit or there are not enough funds in your account, then coverage will be invalidated (insurers will be under no obligation to provide coverage).
- For commercial policies: Insurers have the right to set the premium payment day to within 60 days of the policy start or renewal date. Organizations now will need to have all supporting procurement documents submitted or in place.
How does Pacific Prime meet these new rules
While these new rules certainly make things clearer for all parties involved, it also means that all parties involved also need to be more proactive in ensuring that premiums are paid on time. When it comes to renewing insurance plans with Pacific Prime Singapore, we have actually had a renewals program in place that meets these new requirements. Our sister office in Hong Kong recently published an article that provides detail into how renewing your insurance works with Pacific Prime.
In short: If you are an individual client we will reach out to you at least 30 days before the last day of coverage on your plan. This is usually done via an email which informs you that your plan is nearing renewal and the premium you will pay if you want to renew your plan. We will follow this with calls and another email the following week to ensure that you are aware and able to submit your payment before the end date so as to ensure constant coverage.
For group clients, our dedicated team assigned to your account will stay in touch with you throughout the year. Many teams will start to mention the renewal process three to six months before the date, so as to give lots of time for premium negotiations or finding a new plan.
In other words, as a client of Pacific Prime Singapore, you won’t have to worry about meeting the new regulations. Our renewals process already meets these requirements. If you are looking to learn more about your coverage options and how our reliable service can help you secure the best plan on the market, contact us today.
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