MAS to force standard fee sheet on investment-linked policies

Insurers must also explain when promotional incentives can be clawed back from customers.

The Monetary Authority of Singapore (MAS) will introduce a standardised product highlights sheet for investment-linked policies (ILPs) to help customers better understand their features, risks, fees, and charges.

Gan Kim Yong, deputy prime minister, minister for Energy and Trade and Industry, and MAS chairman, said financial institutions must assess ILPs based on customers' needs, financial circumstances, and the products' features, costs, and risks.

MAS already requires insurers to provide policy illustrations showing projected surrender values and net returns after accounting for premiums, bonuses, fees, and charges.

These illustrations also show the cumulative impact of deductions over the policy term, including beyond the minimum premium commitment period, Gan added.

Financial institutions and their representatives must explain the illustrated benefits and costs, including the conditions attached to promotional incentives and circumstances, under which these may be forfeited or clawed back.

Gan noted that ILPs typically impose surrender charges during the early policy years, which could result in losses from early termination outweighing promotional incentives.

MAS is working with the industry to implement the new PHS and will announce further details in due course.

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