Singapore: Major changes to be made in how insurance is sold Source: Asia Insurance Review eDaily | 02 Oct 2013 Singapore will be introducing several major changes aimed at raising the standards and professionalism of the financial advisory (FA) industry, and enhancing market efficiency in the distribution of life insurance and investment products. The initiatives, which focus on raising the competency of financial advisers, aligning their remuneration framework, and creating a new channel for consumer information and sale of life insurance products, include: (a) a balanced scorecard remuneration framework which rewards the provision of good quality advice to align the interests of FA representatives with those of customers; (b) a direct channel through which basic insurance products can be purchased with a nominal administration fee; (c) a web aggregator to enhance comparability amongst life insurance products; and The changes, to be introduced in stages, with appropriate transition periods, to ensure their smooth implementation, follow a public consultation exercise that ended in June and that was conducted by the Monetary Authority of Singapore (MAS) on the recommendations of the Financial Advisory Industry Review (FAIR). In total, there were 28 recommendations made by the FAIR panel, which published its recommendations on 16 January 2013. MAS has fully accepted 19 recommendations, modified 8 and dropped one recommendation. Mr Lee Chuan Teck, Assistant Managing Director for Capital Markets, MAS, said, “This set of initiatives will transform the financial advisory industry by creating an environment where firms compete on the quality and value of their products and services rather than on the aggressiveness of their sales force. Consumers will be the ultimate beneficiaries of this change. MAS will review these measures periodically to see if more needs to be done.” In a statement, the Life Insurance Association of Singapore (LIA) says that the industry welcomes the MAS’s ‘Response to Public Consultation on Recommendations of the Financial Advisory Industry Review”, stating that it is another milestone in the evolution of the life insurance industry in driving best outcomes for consumers as well as the industry. Ms Annette King, LIA’s President, said that the life insurance industry has long focused on quality outcomes for consumers. “As the MAS Consultation Paper points out, with rising educational levels and financial literacy comes a demand for more customised financial planning solutions among Singaporeans. At the same time we also must meet the needs of consumers who seek basic insurance products.” “Enhancements to the practices of the life insurance industry will follow on the heels of the MAS proposals, which in turn will boost consumer confidence in our industry,” she added.
Posted on: Tue, 01 Oct 2013 23:20:54 +0000
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