|Throughout 2003, many complaints
were received from policyholders alleging that they had been
mis-sold insurance policies with the Critical Year (CY) feature.
These policyholders said they had been misled into taking up
CY policies believing that they need not pay premiums after
the illustrated CY. As these were commercial disputes between
the insurance companies and their policyholders, MAS clarified
that we have no power to arbitrate and that the disputes must
be resolved between the two parties concerned. However, MAS
takes a serious view of mis-selling and misrepresentation
by insurance companies or their agents. We expect them to act
in good faith and to handle all complaints fairly, promptly
and consistently. We issued the Policyholders Guide
to Insurance Policies with CY Feature in June 2003 to
help policyholders better understand the CY feature in their
In July 2003, American International Assurance (AIA) proposed
a range of support packages for affected policyholders according
to their circumstances. It also offered an adjudication process
for policyholders who were dissatisfied with the benefits offered.
Following concerns raised by affected policyholders and the
Consumers Association of Singapore, AIA announced an improved
support package and adjudication process in October 2003. MAS
welcomed this development and said AIAs move warranted
careful consideration by affected policyholders and their representatives.