MAS Accepts Recommendations by Committee on Efficient Distribution of Life Insurance
Singapore, 21 August 2000... The Monetary Authority of Singapore (MAS) has accepted the recommendations by the Committee on Efficient Distribution of Life Insurance (CEDLI) to enhance the sales advisory process, product disclosure, and the professional training requirements for intermediaries selling life insurance products.
CEDLI was appointed by the MAS in March this year to propose changes to raise standards, transparency and efficiency in the distribution of life insurance products. The report has recommended changes to the sales advisory process, additional training and competence requirements for advisors and supervisors, and the disclosure of distribution cost and total expenses.
The proposed changes to the sales advisory process and training requirements will raise standards of service in the life insurance industry. Enhanced disclosure in the form of distribution cost and total expenses will help policyholders to compare product offerings, either from the same firm or across insurance companies.
The Committee recommended that the strengthened requirements apply to all intermediaries selling life insurance products. Further, the standards and disclosure requirements, suitably modified, should also apply to the distribution of other similar financial products to the retail public, such as unit trusts.
MAS agrees. It is reviewing the requirements that apply to different intermediaries and financial products, to ensure that comparable standards of professionalism and advice prevail across the board. This will create a level playing field for financial service intermediaries, and enable consumers to decide on the products that best meet their needs on an informed basis.
In a letter to Mr Law Song Keng, Chairman of CEDLI, Deputy Prime Minister Lee Hsien Loong thanked the Committee for the extensive effort its members contributed in producing the main report. CEDLI is expected to submit its supplementary report on alternative distribution channels in Q4 2000.