Singapore Insurance

Finexis Sends Letter for AXA FutureProtector

2010-10-08T09:07:00.001-07:00

I received a letter from Finexis that said someone from the company will contact me regarding my lapsed AXA FutureProtector.

The matter of fact is this: I was offered FutureProtector free of charge and that was the reason why I took it up.

After the free offer from Finexis, AXA apparently lodged a complaint due to the high number of lapse cases and wanted to claim some money back from Finexis.

I wonder how this will pan out as I have not intention to continue with the AXA FutureProtector.

Maybe they will offer me another free one year trial? =)

Motor insurance losses down

2010-03-17T08:54:00.000-07:00

Motor insurance losses down

It seems like Motor insurance underwriting losses are down for 2009.

The underwriting loss for 2009 was $44.5 million compared to the $214 million in 2008. With a lower underwriting loss, consumers can expect a less drastic rise in motor insurance premiums for their cars. Insurance premiums will most probably stabilise and even if they do increase, will be by a lesser quantum compared to the previous year.

This news will definitely be welcomed by motorists. A lot however still needs to be done to make sure that the motor insurance claims regulatory framework is closely monitored to ensure that nobody abuses the system.

Prudential Buys AIA

2010-03-14T23:14:00.000-07:00

I finally received a letter from AIA regarding the recent news about Prudential's potential takeover.

Dear XXXX,

As you have probably seen in the news, AIG has entered into a definitive agreement to sell AIA to Prudential for approximately US$35.5 billion, subject to Prudential's shareholder approval, regulatory approvals and customary closing conditions.

AIA is a strong and successful organisation today because of our focus on meeting your needs, supported by a dedicated agency force, distributors and professional employees. We understand Prudential and AIG are devoted to preserving the AIA brand and its commitments.

We would like to assure you it is business-as-usual for us and our focus will continue to remain on you, our customer. We will continue to provide you with products and services that meet your needs now and into the future.

There are no changes to the policies you have with us and all policyholder obligations will be honoured.

If you have questions, please do not hesistate to contact your AIA Financial Services Consultant or distributor. Alternatively, please call our AIA Customer Care Hotline at 1800 248 8000.

Prudential takesover AIA

2010-02-28T23:32:00.000-08:00

AIG bids farewell to its Asian arm AIA as a takeover by Prudential takes place.

British insureer, Prudential, will offer up to US$35 million dollars for AIA. The deal will be settled through cash, paid through a rights issue by Prudential and also through AIG taking a minority stake in the British insurer.

Prudential stepped in after AIG announced that it was intending to IPO its Asian arm. Analysts had previously forecasted that the IPO would raise 10 billion dollars. AIG had earlier intended to auction off 49 percent of its Asian arm after the financial crisis but that failed as it did not receive any suitable offers.

Prudential will double its size by this deal.

Medisave Can Now Be Used in 12 Malaysian Hospitals

2010-02-11T08:04:00.000-08:00

Good news to all Medisave Account holders.

Patients can now use Medisave to pay for private care abroad from next month onwards. This is limited to 12 hospitals and medical centres in Malaysia.

However, patients will still have to be referred by two Singapore group centres first before they can seek treatment. The treatment has to be day surgery or in-hospital admissons.

The two groups are Health Management International and Prakway Holdings. The referral centres for both are situated at Balestier Clinic and Health Screening Centre and East Shore Hospital respectively.

This move would give Singaporeans more choice when it comes to seeking medical treatment overseas. The only question now is whether Medishield insurance coverage would also be extended to help pay for the bills overseas.

Medisave is for Rainy Days

2010-01-24T07:30:00.001-08:00

After certain groups were asking that Medisave be allowed for the detection of breast cancer, Health Minister has responded. I agree with his response and feel that medisave should be indeed kept for a rainy day instead.

HEALTH Minister Khaw Boon Wan said on Sunday that he was 'sympathetic' towards the need for women to have mammograms, but said he was concerned about people depleting their Medisave accounts too quickly.

Speaking after house visits where he helped distribute food hampers to 260 households in a rental block in Marsiling, he said: 'Don't forget, Medisave was for hospitalisation. It is for sick people - in fact, very sick people, who have bills of around $2,000.'

He was responding to an appeal from Minister in the Prime Minister's Office Lim Hwee Hua to let women use Medi-save to pay for breast cancer screenings.

Mrs Lim said on Saturday that helping women aged 50 to 69 form a habit of screening for breast cancer every two years is a current priority of the community arm of women PAP MPs, known as Women Inspiring, Nurturing, Grooming Singaporeans (Wings).

Mr Khaw said that his rule of thumb was that anything less than $100 should be paid out of one's cash savings. He added that current subsidies for mammograms bring their cost as low as $50 for women over 40, and $25 for those who have not gone for checks in the past three years.

His worry: That people in their 50s may use their Medisave money on smaller expenses, not anticipating what could befall them in the future.

Prudential Buys UOB Life

2010-01-06T09:32:00.000-08:00

Just managed to browse through the news to see this article pasted below:

UNITED Overseas Bank (UOB) has sold its life insurance unit for $428 million to UK's biggest insurer Prudential, in a move that will free up some capital to strengthen its core banking business.

The so-called 'alliance' will see UOB distribute Prudential's life, accident and health insurance products in Singapore, Indonesia and Thailand for at least 12 years.

UOB Life Assurance, which was incorporated in Singapore in 1990, has over $2 billion in assets as at September last year. It also has 50,000 policyholders who hold a total of 70,000 policies. It has no agents.

UOB Life's products are distributed mainly through channels like bancassurance - or the sale of insurance and other similar products through a bank - and through independent financial advisers.

At a briefing on Wednesday, UOB Group's deputy chairman and chief executive Wee Ee Cheong said that UOB Life is a 'relatively small player' in a highly concentrated and competitive industry. The product manufacturing aspect of its life insurance business is also currently a small contributor to the UOB Group.

'We decided that strategically, it would make more sense for us to divest UOB Life and channel resources and focus to building our core banking business regional infrastructure,' Mr Wee explained. 'Our core business and strengths are in commercial banking and distribution of financial products.

MAS Proposes Policy Owners' Protection Fund

2009-12-23T06:21:00.000-08:00

SINGAPORE: Players in the insurance industry here may have to contribute to a fund to compensate policy owners in the event an insurer defaults.

That is a proposal that the Monetary Authority of Singapore (MAS) is considering in a bid to strengthen the protection of insurance policy owners.

MAS said a proposed Policy Owners' Protection Fund (PPF) will help to alleviate the loss of insurance coverage to policy owners. It is also of the view that such a fund will limit the potential disruption to the society as well as the economy, and will enhance public confidence in the sector.

Among the proposed changes, the PPF schemes will provide 100 per cent coverage of protected liabilities for all life as well as accident and health policies.

The PPF will be administered by the Singapore Deposit Insurance Corporation (SDIC). Member institutions will be assessed once a year for the PPF levies and the minimum levy is S$2,500 per annum.

This is not the first time that such an idea has been broached. In December 2005, MAS issued a consultation paper on the first phase of the PPF review, covering issues relating to membership, scope and funding.

This latest consultation issued on Wednesday revisits some of the issues covered then and takes into account developments since then.

The latest proposals come a year after troubled US insurer AIG nearly collapsed, causing much anxiety to many policy owners here and around the world.

In conjunction with the review of the PPF schemes, MAS also intends to enhance its powers relating to the resolution of insurers.

NTUC Clears Doubt on Payout Under Hospitalisation Plan

2009-12-07T10:16:00.000-08:00

Below is the Straits Times Article on NTUC clearing the air on why they paid the amount they paid for a certain case. Many times, people have no idea what they purchase from the insurance companies because of ignorance and also complicated rules and jargon used by the insurance industry. It is time that the government starts a compulsory education for all in Singapore.

I REFER to Mr Ong Kok Lam's Forum Online letter last Wednesday, "Puzzled by insurer's payout for medical claim".

Mr Ong wrote that his wife could claim only $240 of her $7,995.15 hospitalisation bill under her IncomeShield MA Plan, and inquired why the payout was not higher. Generally, the amount that a policyholder can claim depends on the type of insurance plan that he is covered under.

All shield plans currently available on the market have a "deductible" and a "co-insurance" feature.

A "deductible" is the amount a policyholder has to pay before the insurance benefit is payable.

"Co-insurance" is the percentage of the medical expenses that are in excess of the deductible, and which must be borne by the insured. In addition, there are limits imposed on how much a policyholder can claim under each category of the insurance plan.

We have since contacted Mr Ong to discuss his wife's bill and to explain how the final payout amount was arrived at. Mr Ong has assured us that he understands the calculations.

We would like to assure our customers that we process claims in accordance with the terms of the insurance policy and based on principles of consistency and fairness. We recognise that customers vary in their expectations of health care and payouts and we have therefore made available a range of plans that provide choices in deductibles and benefits to cater to different needs and budgets. As individuals' needs change over time, we encourage our policyholders to review their health insurance plans regularly to ensure that the plans remain suited to their needs.

We thank Mr Ong for sharing his experience and for giving us the opportunity to make this clarification.

Lee How Teck (Ms)
Senior vice-president & general manager
Group & Health Insurance
NTUC Income

Restructured Hospitals in Singapore

2009-11-20T18:47:00.001-08:00

What are restructured hospitals in Singapore?

You will comonly find the term restructured hospitals in the various hospitalisation plans. I did some research to find out what these hospitals are actually.

These hospitals are actually run as a private company and is wholly-owned by the Government through the Ministry of Health, Singapore, and it receives a government subsidy for the provision of subsidised medical services to its patients.

These basically refer to the following hospitals:

1. Alexander
2. Changi General Hospital
3. National University Hospital
4. Singapore General Hospital
5. Tan Tock Seng Hospital
6. Khoo Teck Puat Hospital (under construction)

Changes to Section 57 of the Insurance Act

2009-10-29T08:25:00.000-07:00

There has been a recent change in Section 57 of the Insurance Act where the insurable interest on the life of a child has been amended to below age 18.

An extract of the act states : "A Life policy insuring the life of a person which is issued by a registered insurer shall be void unless his child or ward under the age of 18 years at the time the insurance is effected."

This essentially means that parents can no longer buy an insurance policy on their child's life once he is above the age of 18. Also, a transfer of policy (be it under any of the optional riders) cannot take place unless the child is below 18 years of age.

Why We Should Eat Curry

2009-10-28T22:22:00.000-07:00

I stumbled upon this article while reading the news. Given the high incidence of cancer in Singapore, it might be interesting statistics to compile

Researchers at Ireland have found something unique in curry that might help to cure cancer. Read the interesting article below to find out more.

LONDON - A MOLECULE found in a curry ingredient can kill oesophageal cancer cells in the laboratory, suggesting it might be developed as an anti-cancer treatment, scientists said on Wednesday.

Researchers at the Cork Cancer Research Centre in Ireland treated oesophageal cancer cells with curcumin - a chemical found in the spice turmeric, which gives curries a distinctive yellow colour - and found it started to kill cancer cells within 24 hours. The cells also began to digest themselves, they said in a study published in the British Journal of Cancer.

Previous scientific studies have suggested curcumin can suppress tumours and that people who eat lots of curry may be less prone to the disease, although curcumin loses its anti-cancer attributes quickly when ingested. But Sharon McKenna, lead author of the Irish study, said her study suggested a potential for scientists to develop curcumin as an anti-cancer drug to treat oesophageal cancer.

Cancers of the oesophagus kill more than 500,000 people across the world each year. The tumours are especially deadly, with five-year survival rates of just 12 to 31 per cent. Ms McKenna said the study showed curcumin caused the cancer cells to die 'using an unexpected system of cell messages'.

Normally, faulty cells die by committing programmed suicide, or apoptosis, which occurs when proteins called caspases are 'switched on' in cells, the researchers said.

But these cells showed no evidence of suicide, and the addition of a molecule that inhibits caspases and stops this 'switch being flicked' made no difference to the number of cells that died, suggesting curcumin attacked the cancer cells using an alternative cell signalling system. -- REUTERS

5 Insurance Plans Everyone Needs

2009-10-25T09:52:00.001-07:00

This is adapted from the article that came from Straits Times. While the Straits Times article said that there are only 4 types of cover a person need, I believe that there are 5 types of cover.

1. Death Cover.

2. Medical Cover.

3. Critical Illness Cover.

4. Disability Cover.

5. Personal Accident Cover.

AIA Signature - Protection for the priviliged few

2009-10-22T19:59:00.000-07:00

I received a letter from AIA recently.

It reads:

In appreciation for your continued loyalty and support, we'd like to extend an exclusive invitation to you to apply for our first premier accident plan - AIA Signature. The AIA Signature plan offers you our highest level of accident protection, with coverage up to $500,000.

The invitation is for a select group of priority AIA policyholders, of which you are one. Available for a limited time, this exclusive offer is valid from 15 Oct 09 to 28 Nov 09 and is strictly by invitation only.

With AIA Signature, you can enjoy:

A high coverage amount of up to $500,000 for Accidental Death, Dismemberment and Permanent and Total Disability
Accidental Medical Reimbursement of up to $2000
Premiums do not increase with age

And the above coverage is yours at only $400 until age 75.

No health questions ask and no medical examination is required.

I am not too sure what is so special about this accident plan because accident plans normally do not require and health questions or medical examination. In addition, $400 might seem to be cheap but I do not see the need to be covered for such a high amount for accidental death.

NTUC Income's Aim Series

2009-10-15T18:54:00.000-07:00

NTUC Income’s Aim Series are comprehensive life-cycle solutions to help investors manage their investments over their different life stages.

Designed as “all-in-one” financial planning tools, the Aim Series consist of 4 Target Date portfolios, viz Aim 2015, Aim 2025, Aim 2035 and Aim 2045, which seek to provide long-term capital growth over the given investment time horizon.

A fifth portfolio, Aim Now, is designed for investors who are looking for capital stability and potential income.

Each Aim Series fund will have a different risk profile and will invest in a wide range of investments covering markets throughout the world.

Aim 2015, Aim 2025, Aim 2035 and Aim 2045 will have investment horizons centred around 2015, 2025 2035 and 2045 respectively, and will typically invest in a higher proportion of growth assets in the wealth building life stage to capture growth opportunities from equities, property securities and commodities.

These will be gradually reduced over the portfolios’ glide-paths as the funds approach their target dates in favour of fixed income assets and cash instruments. Upon maturity, the target date products will be terminated and merged into Aim Now.

Investors with a moderate risk profile or who are looking for a post-retirement solution can also invest directly in the Aim Now fund which offers a semi-annual payout feature, with a potential distribution of up to 4% per annum.

The Aim Series will be managed against a composite benchmark comprising the MSCI AC World TR Index, MSCI AC Asia ex Japan TR Index, FTSE STI Index, Barclays Global Aggregate Index (hedged to S$), UOB Singapore Government Bond Index (All), FTSE EPRA/ NAREIT Developed Real Estate Index and DJ UBS Commodity Index.

Manulife's Life Protector Plus

2009-10-14T08:31:00.000-07:00

Manulife has a participating whole life policy called Life Protector Plus that is designed to provide high coverage at affordable premiums.

For a male non-smoker age 27, coverage of $240K can be obtained at a monthly premium of $194.

How it provides such a high coverage is with something called the Minimum Death Benefit (MDB) factor that depends on the entry age of the policy holder. Each band of entry age has a different MDB factor.

Age 0 to 30 = 2.4
Age 31 to 35 = 2.15
Age 36 to 40 = 1.90
Age 41 to 45 = 1.65
Age 46 to 50 = 1.40
Age 51 to 55 = 1.20

So the basic sum insured for a guy age 27 is actually 100K but due to the MDB factor of 2.4, his coverage is increased till $240K until he is age 65. Thereafter, the MDB factor drops to 1.0

Do note that with any surrender of reversionary bonus or coversion of policy to reduce paid up, the MDB factor will drop to 1.0

This MDB factor also applies to the Critical Care Enhancer Rider (for critcial illness) up to age 65 too.

Aviva's MyShield

2009-10-13T06:37:00.000-07:00

Aviva's Myshield is a hospitalisation and surgical insurance plan that helps to insure against medical costs.

It is a Medisave Approved Integrated Plan which is an Enhancement plan on top of the basic Medishield plan operated by the CPF board. Medishield forms the basic tier of insurance whilst MyShield serves as the enhancement to Medishield.

One unique feature of the the Myshield plan is that when both parents are covered under the plan, their children (up to age 20) will be automatically covered too for FREE.

With the MyShield Plus rider, one will also be covered for the co-insurance portion. There are no riders available for the deductible portion.

To be eligible for the plan, the person must be a Singapore Citizen or Singapore PR; age 75 years below based on next birthday; and must have a CPF Medisave Account from which to pay for the premiums of the policy.

One of the strong points of this plan is its affordability especially for families because of the free coverage for children as well as the "As Charged" limits for the various claims.

Fire Insurance for All Mosque

2009-10-08T21:08:00.001-07:00

According to this Channel News Asia report, the Islamic Religious Council of Singapore (MUIS) is considering compulsory fire insurance for all mosques in Singapore. This was after the prayer hall of Kampong Siglap Mosque was burned by fire two days ago.

Currently, only 90% of the 69 mosques in Singapore have fire insurance coverage as it is not mandatory under the building and construction laws for mosques to be insured against fire.

Various insurance companies do provide fire insurance be it for home or industrial buildings. They include companies like MSIG, Tenet and China Insurance.

Increase in Eldershield Payout?

2009-10-03T10:26:00.000-07:00

SINGAPORE :

Health Minister Khaw Boon Wan is mulling an enhancement to the ElderShield payout.

In an interview with MediaCorp, he said he is proposing a payout of S$800 a month over 8 years.

The severe disability insurance scheme for long-term care currently pays out S$400 a month for six years. But he warned the enhancement would mean an increase in premiums.

Mr Khaw said the change is necessary as most patients will desire a higher level of nursing home or home nursing care.

It could cost S$800 to over S$4,000 a month to stay in a private nursing home.

But the health minister stressed that ElderShield's philosophy of insuring only catastrophic needs will not change. This will ensure low premiums and minimise abuses.

Insurance Claims

2009-10-01T00:05:00.000-07:00

I found this article on the Straits Times. Make sure that you do not fall into the same predicament as this Mr Tay.

_________________________________________________

He got $900k but wants to claim an additional $17,000

A FREAK accident with a sheet of wire mesh cost Mr Tay Eng Chuan his left eye, and it took him seven years to get almost $1 million in insurance claims.

But it will take a little longer before the saga is over. His last hope to claim a further $17,000 from his insurer now lies with the highest court in the country - the Court of Appeal.

He received more than $900,000 in insurance payouts early this year after arbitration hearings in 2007.

But unhappy with the result, he appealed to the High Court against the decision by the arbitrators.

After the High Court ruled against him this year, he now wants to take the case to the Court of Appeal.

Mr Tay, 60, a remisier, became blind in his left eye after the accident in November 2002.
The accident happened as Mr Tay, an engineer by profession, was carrying a sheet of wire mesh in his hands.

As he bent down to enter a store room in his home, he bumped his head on the beam just above the entrance.

A corner of the wire mesh became embedded in his left eye, and his shouts drew the attention of his wife, who helped him get out of the room before calling for the Singapore Civil Defence Force.

Ambulance officers helped remove the wire mesh and took him to the National University Hospital, where he was warded for 12 days.

He filed his insurance claims within the month, but his two insurers rejected all of them two years later, claiming Mr Tay had caused the injury on purpose.

Unhappy with their decisions, Mr Tay took them to an arbitration tribunal managed by the Singapore International Arbitration Centre.

Out of the six insurance suits, Mr Tay's claim against Overseas Union Insurance (OUI) failed as the tribunal found he had failed to disclose other insurance policies he held - a requirement for OUI policy holders. But it awarded him payouts on the other five policies managed by United Overseas Insurance (UOI).

By February this year, UOI had paid him about $940,000 in insurance, interest and costs. But Mr Tay wanted more.

He wanted amendments made such that he would get a further $17,000, but the tribunal did not allow it.

Mr Tay then took his case to the High Court, in effect for permission to appeal against the decision of the tribunal. This, too, was rejected.

Justice Judith Prakash noted that Mr Tay had been slow to file his appeal, and was not convinced by his reasons for the delay. Among other things, Mr Tay said he was 'immersed' in another claim against another insurer, which made it difficult for him to meet the deadline.

But the judge noted that Mr Tay was capable of multi-tasking.

Justice Prakash said: '(Mr Tay) is an educated and intelligent litigant who was no stranger to arbitration proceedings.'

She added that he had raised only 'minor points', and therefore, the appeal should not be allowed to go on. Contacted on Tuesday, Mr Tay said he was disappointed.

This article was first published in The Straits Times.

Tokio Marine - Peace of Mind Cancer Care

2009-09-15T00:00:00.000-07:00

Tokio Marine Asia (TM Asia) has also launched a critical illness plan which provides the first cancer-only coverage in Singapore. It allows up to 5 claims on early cancer with no waiting period between claims. One can chose the protection term of up to either age 60, 65 or 70. The premiums are also much cheaper compared to Great Eastern's Early Payout Critical Care and AXA's Early Payout Living Enhancer. This is probably due to the fact that TM Asia's plan only covers cancer and not the other critical illnesses.

AXA - Early Payout Living Enhancer

2009-08-14T20:55:00.000-07:00

AXA has recently launched a new Critical Illness protection plan similar to Great Eastern's Early Payout CriticalCare plan. AXA's Early Payout Living Enhancer offers the following:

1. Expedited payout at early stages of critical illness, so you will not need to dip into your savings to pay for early medical treatment.

2. Extensive coverage of up to 60 medical conditions, which supplements your existing critical illness plans.

3. Exemption of waiting period between multiple claims so you are well protected in the event of multiple critical illnesses, up to 100% of the Sum Assured.

4. Extra death benefit of S$15,000 to help defray the immediate living expenses of your loved ones.

Great Eastern - Early Payout CriticalCare

2009-08-12T06:25:00.000-07:00

Early Payout Critical Care from Great Eastern can be purchased as a standalone critical illness plan or as a rider to one of their plans. Some of the key features of the Early Payout Critical Care are as follows:

1. Standalone plan or rider with varying terms (6 years till age 75). Entry age is 1 to 65.

2. Able to opt from $50,000 to $1 million in coverage.

3. Early payout is based on differing severity levels for the 30 critical illnesses which are grouped into 3 groups of Severity 25, Severity 50 and Severity 100.

4. There are limits to what can be claimed under Severity 25 and Severity 50.

5. Possible for multiple claims across unrelated illnesses without any waiting period

The advantages of the Early Payout Critical Care introduced by Great Eastern are as follows:

1. First plan in Singapore to offer payouts at earlier stages of cancer.

2. Multiple lump sum payouts at different stages of the same critical illness or across different critical illness.

3. No minimum waiting period between claims.

Some disadvantages are as follows:

1. Slightly more expensive compared to a traditional critical illness benefit. This is understandable since it offers early payouts.

2. Limited incentive to be covered greater than $100,000 as limits on the payout for severity level 25 and 50 will make it difficult for one to claim in excess of $100,000

3. If insured does not survive beyond 30 days, only $10,000 in death benefit will be payable.

4. Coverage is up till age 75 only. Critical illness is more likely to strike when one is older so this is something to take note of when choosing this plan.

Implications of Great Eastern's One Time Redemption Offer for Great Link Choice

2009-08-05T07:17:00.001-07:00

Below is my analysis of the one time redemption offer made by Great Eastern to policy holders of GreatLink Choice:

1. Great Eastern will definitely be making a loss from it. Even if not all policy holders take up the one time redemption offer, Great Eastern still stands to lose a huge sum of money. This though is done to prevent any further damage to the company name that might arise should policy holders follow the way of those who were affected by the Lehman mini bonds. Should policy holders have the chance to complain to MAS, the investigations could land some agents into trouble and might also tarnish the name of Great Eastern.

2. Whether this is a good public relations (PR) move remains to be seen. It most probably will be as clients will feel that Great Eastern truly cares about the interests of its clients. On the whole, the public will view it as a good move made by an insurance company versus how the banks have treated their clients in the Lehman saga.

3. Agents affected by the commission clawback could be adversely affected as some would have to cough up $100,000 in commissions they have received in the past. On the other hand, it provides a good sales opportunity for other agents as clients who receive their capital back might be looking for other policies to invest in.

Great Eastern to return $250m

2009-08-05T07:14:00.000-07:00

IN A stunning development, about 18,000 Great Eastern Life customers who bought investment products similar to the ill-fated Lehman Minibonds will get all of their money back. And they did not have to ask for it. The move by GE Life, which will cost the insurer a whopping $250 million, is purely voluntary.

The products in question are called GreatLink Choice (GLC) - a series of single-premium investment-linked insurance products sold in five tranches between 2005 and 2007, netting $594 million in investments.

Like Lehman Minibonds, GLC was linked to a class of complex financial instruments whose value has been badly hit by diving financial markets. So despite diversifying the risk and building in various loss-protection features, the values of the GLC plans have plummeted between 40 and 80 per cent.

'Great Eastern understands that these steep discounts have given rise to concerns among GLC policyholders,' group chief executive Ng Keng Hooi said in a statement on Friday.

'To address GLC policyholders' concerns in these extraordinary times, we have taken a decision to make this one-time offer, as a gesture of goodwill, to redeem these products. Our offer is voluntary, and is made without any admission of liability.'

The GLC plans, available for a minimum investment of $5,000, had aimed to provide investors with fixed annual payouts ranging from 3.5 to 4.9 per cent. They also aimed to return to investors their principal on maturity, though both the annual payouts and principal repayment on maturity were not guaranteed.

The plans came with a five- or seven-year maturity period and the first tranche would have matured in September next year. But policyholders can now opt, anytime from Monday to Aug 28, to redeem their investments and receive a sum equal to their original investment, less total payouts received to date.

The unprecedented move comes three weeks after a lengthy investigation by the Monetary Authority of Singapore (MAS) into the selling of similar structured products in the banking and securities sectors.

About 9,900 people lost most or all of their investments totalling about $520 million in structured products such as Lehman Minibonds and DBS Hi Notes 5. Ten financial institutions were penalised, and 3,900 investors received a total of $107 million as compensation.

GE's surprise offer on Friday to redeem up to $250 million is more than twice that amount, and that immediately drew high praise from consumer advocates such as the Securities Investors Association of Singapore (Sias).

Source: Straits Times