SINGAPORE — The Monetary Authority of Singapore (MAS) is proposing that financial institutions collect less information from customers regarding selected insurance policies.
MAS said the proposals, which will be published in a consultation document on Friday 2 February, will make it easier for consumers to meet their protection needs by purchasing simple, cost-effective insurance policies. Ta.
Currently, the information that financial institutions are required to collect and document from customers regarding investment products includes a list of nine categories outlined in the Financial Advisers Act of 2001 (FAA); , lists eight different categories of information required for accident and health insurance policies. MAS Notice 120 on Disclosure and Advisory Process Requirements for Accident and Health Insurance Products (Notice 120) provides an overview.
Under this proposal, financial institutions that recommend certain insurance products in accordance with basic financial planning guides would be exempt from full information collection requirements under the FAA and MAS Notice 120.
Instead, the financial institution will review the customer’s objectives, annual income, current insurance policies that provide death, total disability, and critical illness coverage, and, in the case of stand-alone critical illness policies and riders, the insured. Only information about the medical condition the person has should be collected. There may be.
Basic financial planning guide
The basic financial planning guide, launched by MAS in collaboration with Money Sense, Central Provident Fund Board (CPFB) and financial industry bodies in October 2023, aims to help individuals start taking proactive steps towards saving. Some rules of thumb are outlined. Insurance and investment needs.
Specifically, the guide encourages Singaporeans to allocate up to 15% of their net income to insurance. Consumers are also advised to purchase insurance for 9 times their annual income in case of death and permanent disability, and 4 times their annual income in case of critical illness.
On January 31, the guide published six customized variations to address personal financial planning needs at different life stages, from new employees to those nearing retirement.
“The proposals aim to simplify the financial advisory process to help Singaporeans obtain cost-effective insurance. At the same time, the proposals are aimed at simplifying the financial advisory process to help Singaporeans obtain cost-effective insurance. The current cap acts as a safeguard to protect the interests of consumers,” said Lim Tuan Lee, MAS Assistant Managing Director (Capital Markets).
MAS is currently seeking feedback from financial institutions, consumers and other stakeholders on its proposals. Comments on the proposal must be submitted by March 15, 2024.
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