there are no provisions in the Insurance Act (IA)
to govern the nomination of beneficiaries (NoB)
to the proceeds from insurance policies. However,
a nomination by the policyholder of his spouse
and/or children on his life insurance policy is
governed by section 73 of the Conveyancing and
Law of Property Act (CLPA). This will automatically
create a statutory trust in favour of the nominees.
Some insurers and policyholders are concerned about
the apparent ambiguities in the application and
effect of section 73 of the CLPA.
MAS will be amending the IA to bring under its
purview a NoB framework. This is to accord policyholders
greater choice and flexibility in the disbursement
of their policy proceeds, and to make the process
of nominating beneficiaries clearer. Section
73 of the CLPA will be correspondingly repealed.
The new NoB framework will:
||Deal with both revocable and
||Govern disbursement of proceeds from insurance
||Clarify the legal standing of nominations
vis-à-vis wills and other legal instruments.
Following the feedback from the public consultation
conducted in December 2005, MAS will draft the
provisions of the NoB framework into the IA for
implementation by the first quarter of 2007.