MAS to Launch Revised Fair Dealing Guidelines for Greater Consumer Protection
by Fintech News Singapore March 18, 2024The Monetary Authority of Singapore (MAS) is set to update its Guidelines on Fair Dealing within the coming weeks, signaling a major step towards enhancing customer protection across all financial sectors.
Announced by Ho Hern Shin, Deputy Managing Director (Financial Supervision) at the Life Insurance Association (LIA) Annual Luncheon, the revised guidelines will extend to cover all financial institutions and the entire spectrum of financial products and services offered to customers.
This initiative is expected to redefine how life insurers operate, embedding the principle of fair dealing in every aspect of their interaction with customers.
With the guidelines in place, life insurers will be encouraged to innovate product designs that genuinely meet consumer needs while promoting positive behaviors.
For example, wellness programmes that reward policyholders for maintaining a healthy lifestyle could become more prevalent, alongside flexible insurance products that offer adjustable payment options to make insurance more accessible to a wider audience.
One example would be AIA’s Vitality Active Benefits Programme, there was an 18% increase in physical activity among members following the introduction of “Active Benefits”, with the most significant increase observed in individuals over the age of 50.
This approach not only benefits the policyholders but also aligns with national efforts to manage healthcare costs and improve public health outcomes.
Additionally, bite-size insurance products with flexible payment options like SNACK by Income lower the entry barrier for those who otherwise may not buy any insurance.
The guidelines will also rework underwriting practices where decisions are made based on accurate and relevant data, ensuring fair treatment for all customers, including those with pre-existing mental conditions or disabilities.
In terms of sales and advisory services, the focus will shift from merely selling products to offering holistic financial advice. Tools like SGFinDex will facilitate a comprehensive overview of a customer’s financial health, enabling insurers to provide tailored advice that truly serves the customer’s long-term interests.
Last year, MAS, MoneySense, and the CPF Board, together with LIA and other industry associations, launched the Basic Financial Planning Guide.
The guide simplifies the financial planning journey for consumers, providing easy to understand and implement rules of thumb for individuals at different life stages. This includes advise on spending no more than 15% of their take home salary on insurance protection.
Post-sales engagement will see significant improvements as well, with insurers investing in digital platforms that allow customers to manage their policies, submit claims, and update beneficiary information with ease.
Effective and empathetic handling of complaints and inquiries will be crucial, ensuring customers feel supported throughout their journey with the insurer.
At the heart of the updated guidelines is the necessity for a cultural shift within insurance firms towards a more ethical conduct and customer-centric approach.
Senior management and boards will play a crucial role in fostering these values, making it clear that fair dealing and ethical considerations are paramount, and that profits do not take precedence over customer welfare.
Ho Hern Shin
She concluded,
“As MAS’ Guidelines on Fair Dealing are finalised, I hope that life insurers will respond with commitment, resolve, and investments, to deliver superior customer outcomes using levers in every part of your business, and to keep the Singapore life insurance industry resilient, vibrant, and a trusted partner, for life.”
Featured image credit: Edited from Unsplash
