Our Experience on Insurance Dispute Resolving in Singapore

My husband and I were first recommended to buy Wholelife+Term insurance by a former colleague when he switched careers to become an insurance agent. A year later, our former colleague changed companies and handed over our policies to his friend. Later on, at his friend’s suggestion, we switched our Wholelife policy once, whether it was in our favor or beneficial for the new agent to change the policy is ambiguous. Wholelife premiums are quite high, and agents earn substantial commissions in the first few years. Being trust in others and a lack of financial awareness, we did not investigate further. In hindsight, the agent was negligent in not providing us with enough explanation, merely saying that the new policy was better, without mentioning specific details regarding costs, returns, and benefits. Well, all these were not the directly related to the disappointing experience we had later.

Last year, the insurance agent recommended upgrading the Term insurance, which we found reasonable at the time, so we signed a new policy and canceled the old one (Now I doubt the recommendation, why not add aother term on top of the existing but cancel the old ones?). However, something went wrong in the process, and my husband’s old policy was not terminated in a timely manner. He remained double-covered until he discovered it a year later when it was time to renew. Within the whole year, the insurance agent did not provide us with any updates. After discovering the issue, my husband contacted the agent multiple times to inquire about the situation, but he did not provide a reasonable explanation, only blaming it on both system and human errors. He did not mention any resolution but only said to my husband — “forget about the old term, remember you only had one policy now”. After repeated inquiries, he said he had urgent matters and didn’t respond to messages for three weeks. In the end, my husband had to contact the insurance company directly, providing all conversation records as proof that the double coverage was not voluntary.

After several months of lengthy processing by the insurance company (why did it take so long?), the complaint was finally forwarded to the insurance agent. Our friend who had initiated the policies with us earlier became aware of the issue and tried to intervene, suggesting we withdraw the complaint and resolve it privately. However, my husband refused, not for a few hundred dollars in premiums but as a protest against the lack of transparency in the insurance industry and the fundamental conflict of interest between insurance agents and clients.

Insurance agents can take advantage of the trust clients place in them, especially if they are friends, to benefit themselves by not recommending the cost optimized plans to the clients. How can clients’ interests be safeguarded without regulations and rules? If there are system issues or unintentional human errors within an insurance company, it is their responsibility to resolve these issues and standardize processes to protect both clients and employees’ interests. If a particular insurance company cannot resolve the issue, the regulatory authority (MAS) can step in. Settling the matter privately only hides the problem, potentially causing more people to suffer due to similar issues.

I believe the insurance agent understood the seriousness of the complaint, not just regarding the term issue, but because he failed to provide enough transparency in all previous services, which could be even more critical if exposed during an audit. If the insurance agents do not provide sincere and objective financial and insurance advice from the beginning, they will bear the consequences themselves because client learn and grow. Of course, our intention is merely to settle the double coverage issue not push the audit to any “suspected dishonest recommendation”.

After refusing to settle privately, my husband continued to follow up with the insurance company’s customer service. However, they ignored him for months, and all emails went unanswered.

I then suggested that he file a complaint with FIDReC. He submitted the materials online and discussed the details with the case manager via email. The case manager then contacted the insurance company, and surprisingly, they responded immediately by refunding the premium but refused to admit any wrongdoing on their part. They portrayed the refund as a goodwill gesture and demanded that further discussion on the matter cease. One could interpret this as the insurance company seeking a private resolution. Given my husband’s personality, I was already surprised that he invested so much energy into the complaint, and at this point, he compromised. Even for the compensation refund, the insurance company continued to delay, citing system issues (they previously blamed the double coverage on system faults — is their system so unstable?). My husband had to push for a resolution through the case manager again and finally got the issue resolved.

So, the question remains: if the insurance agent made an error in filling out the policy, who should bear the responsibility? Was it negligence on the part of the insurance agent? After all, the client did sign and confirm the policy (even if they didn’t read the details). I still don’t have an answer to this question.

Some personal opinions:

• Singapore society is relatively fair, but individuals need to fight for their own interests. Singaporeans’ tendency to complain has its reasons, and my husband and I are quite passive, but we have had to complain several times to protect our interests.
• When buying insurance, it’s crucial to understand what you are purchasing. Reading the policy and contract is essential.
• Understanding MAS’s regulation of the insurance industry is essential. When issues arise, insurance companies and agents will primarily protect their interests.

Last year, I read a Japanese novel called “Scream”, which depicted the dark side of the early insurance industry in Japan. I thought that in Singapore, with its advanced society, personal relationships should not play a role in insurance sale and service. However, it seems that it’s not the case. Insurance should be about purchasing products and services with money, and it should not involve personal relationships. As society develops, I hope there will be more fee-only financial and insurance advisory services suitable for ordinary people and families. As of now, that has not been achieved, so relying on Singapore’s mature legal and regulatory system to provide oversight is crucial.

Disclaimer: Content in this blog is for informational purposes only and is not intended to be personal financial advice. Please make your financial decisions with due diligence.

I am writing my Money Story at https://littlecheesecake.me/money.sense