We thank Mr Cheong Wing Kiat for his letter, “Why was policy backdated?” (Oct 21).

2. If both the insurer and the policyholder agree, a life insurance contract can bear a policy inception date that is earlier than the actual application date. Backdating a policy potentially allows a consumer to pay lower premium rates based on a younger age, or enjoy certain policy benefits, such as maturity payouts, earlier. These consumers will have to pay the applicable premium for the period between the policy inception date and the actual application date.

3. Backdating of a policy is subject to the conditions set out by the insurer, which could include limiting the types of policies that can be backdated and the period of backdating allowed from the actual application date. Backdating of insurance policies is also practised in other jurisdictions.

4. The Monetary Authority of Singapore (MAS) neither prohibits nor prescribes requirements on backdating of life insurance policies. What MAS requires is that financial advisers and their representatives clearly explain to consumers the key features, including risks and costs relating to the recommended life insurance product, so that consumers can make informed decisions.

Dawn Chew

Director (Corporate Communications)

Monetary Authority of Singapore