Health Insurance Regulation

15 Sep 2009

Question No:  145  

Question

Name of the Person: Assoc Prof Paulin Tay Straughan

To ask the Minister for Health (a) whether there is a regulatory body that oversees private health insurers in Singapore; (b) whether there is data on the proportion of rejected applications for private health insurance; and (c) what are the reasons for rejecting these applicants.

Reply

Reply From MOH

1. Private health insurers are regulated by both the Monetary Authority of Singapore (MAS) and my Ministry.

2. MAS regulates and supervises all insurance companies in Singapore, including those that offer health insurance. MAS regulates them with a view to promoting the safety and soundness of the industry. Insurance companies are required to have sound risk management systems and maintain adequate financial resources in order to meet their obligations to policyholders.

3. My Ministry regulates Medisave-approved Integrated Shield Plans to ensure that they make proper use of Medisave monies for the welfare of policyholders. We require the Integrated Shield Plans to focus on catastrophic coverage where risk-pooling is most effective. They must retain the core co-payment principle through features such as deductibles and co-insurance. This is to discourage over-consumption and help to keep premiums affordable. Before a plan can be marketed, it is scrutinized by my Ministry to ensure that it complies with these basic requirements. The insurers compete to provide their policyholders with the most cost-effective insurance protection over their lifetime in the most sustainable manner.  We encourage them to innovate with new product features but we discourage comprehensive first dollar coverage which has led to much moral hazard problems elsewhere.

4. We encourage insurers to be transparent and upfront with their customers by keeping their terms and conditions simple and clear. Where necessary, we may require an insurer to amend its contract if any of the terms and conditions are ambiguous.

5. We assess the performance of the insurers on an ongoing basis. For example, the time taken for them to process claims is published on my Ministry’s website and updated quarterly.  In the same website, we provide a comparison of the key features of the Integrated Shield Plans marketed in Singapore.  This will help the public to choose the plan that best meets their needs and budget.

6. However, MOH does not regulate the decision of private insurers on whether to accept applicants into the plans.  These decisions will have to be made by the insurers based on their claims experience, risk appetite and actuarial analysis. We therefore do not have data on the proportion of applicants who are not accepted for private health insurance coverage, nor the reasons for the rejection.

7. But we do require the insurers to guarantee renewals so that policyholders are not dropped should they fall sick and incur high claims later.