I am glad to see the issue of No-Claims Discount (NCD) being aired in The Straits Times' Forum.
I wrote about my personal experience on this subject in this blog headlined, "Why must motor insurers have it both ways", on April 1 but, sadly, could not get the authorities to do something about it.
I hope with the issue being raised again this time, some kind of action will be taken.
It is so obvious in this NCD issue that our motor insurers are having their cake and eating it. The queston is, why is our Insurance Commissioner blind to it?
Here is the letter by Tan Kin Lian, former NTUC Income's CEO, published in the Forum Page today (Oct 6):
"NO-CLAIMS DISCOUNT PROTECTION
A fairer contract for motorists
THE General Insurance Association of Singapore's reply on Monday ('GIA's advice to motorists on no-claims discount') noted that motor insurers here offered different variants of the no-claims discount (NCD) protector.
But as a market practice, all motor insurers disallow the transfer of protected NCDs from one insurer to another.
It is unfair for consumers to pay an additional premium for an NCD protector and to suffer a large loading in the premium on making a claim.
It defeats the purpose of purchasing the protector in the first place.
It is unrealistic to expect consumers to be aware of the intricacies of the different NCD protectors offered by insurance companies. Some consumers may be paying the additional premium without any real benefit.
The association should ask its members to have a standard feature in the NCD protector that guarantees the preservation of the full NCD and the waiver of any loading to the premium as the result of one claim.
The cost of the waiver of the loading can be priced into the premium for the protector.
This would be a fairer contract for consumers.
I hope the regulatory body will encourage the association to take this step in the interest of fair dealings with consumers.
Tan Kin Lian "