Complaints of Unsatisfactory or Disputed Insurance Claims
Ministry of FinanceSpeakers
Summary
This question concerns Mr Liang Eng Hwa’s inquiry into the volume of unsatisfactory insurance claim complaints and the adequacy of Singapore's dispute resolution framework. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong responded that insurers must follow guidelines on fair dealing and risk management, with the Monetary Authority of Singapore taking action against firms failing to meet expectations. He outlined a resolution process where consumers first contact insurers before seeking mediation or adjudication through the Financial Industry Disputes Resolution Centre (FIDReC). Over the last three years, FIDReC and MAS received annual averages of 246 and 91 insurance claim disputes respectively, representing less than 0.01% of all claims received. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong emphasized the framework's effectiveness, noting that over 85% of FIDReC cases were resolved and less than 0.1% of claims from major insurers resulted in litigation.
Transcript
82 Mr Liang Eng Hwa asked the Prime Minister and Minister for Finance (a) on the number of complaints MAS or the related agencies received with regards to unsatisfactory or disputed insurance claims in each of the last three years; and (b) whether the current dispute resolution framework and mechanism has been adequate to reasonably and fairly resolve insurance claims disputes.
Mr Gan Kim Yong (for the Prime Minister): Insurers are expected to promptly pay all legitimate claims, and to be facilitative and fair to claimants during the claims handling process. This includes providing clear instructions on documents required for claims submission, as well as having sound internal processes to validate the claims.
The Monetary Authority of Singapore's (MAS') Guidelines on Fair Dealing sets out how licensed financial institutions, including insurers, are expected to treat customers fairly at various stages of the customer journey. In addition, MAS' Guidelines on Risk Management Practices for Insurance Business sets out supervisory expectations for proper claims handling.
Where insurers fall short of our expectations, MAS will take appropriate action, which could involve requiring the insurer to review its policies and procedures to prevent recurrence, as well as its restitution to the consumer.
Consumers who believe their claims have been unfairly rejected should first contact their insurers, who are required to handle complaints independently, effectively and promptly. If a satisfactory resolution cannot be reached, consumers may file for mediation or adjudication at the Financial Industry Disputes Resolution Centre (FIDReC), which offers independent, impartial and low-cost dispute resolution services.
Over the last three years, FIDReC completed, on average, 246 mediation and adjudication annual insurance claims related to disputes on claim liability and amounts awarded, while MAS received an average of 91 such similar complaints per year. These represent less than 0.01% of claims received by insurers. FIDReC continues to provide an important and effective mechanism for resolving consumer disputes. More than 85% of claims handled by FIDReC were either resolved at mediation or adjudication. Less than 0.1% of claims received by the larger direct insurers, which account for 80% share of the local market, were litigated.