The Competition Commisssion of Singapore (CCS) called me today (April 23) to give its verdict on a query I posed to them regarding the motor insurance industry here (See post, Why must motor insurers be allowed to have it both ways?).
I wanted to know whether the industry was behaving like a cartel in a case concerning my wife who was told by her insurer that she would be penalised if she were to switch to another insurer after she had made an insurance claim.
The CCS verdict was a clear "No, not in this case". As I was lunching with friends, I did not have the opportunity to ask the CCS spokesman on the phone for an explanation. Maybe I should later, if only to enlighten myself on the criteria it had used to arrive at its decision.
The Royal Sun Alliance, through its brokers, had told me that my wife's no-claims bonus would be reduced from 50% to 20% if she switched insurer after the accident claim.
That was hard for me to swallow because her insurance had a no-claim bonus protection. But that, I discovered, meant very little after an accident because the insurer could jack up her premium, as in her case, without much explanation.
And the fact that she also could not switch insurer without losing a big chunk of her no-claim bonus made it even worse. Apparently, this is an industry practice which I thought amounted to a cartel.
The CCS obviously thinks otherwise. I am dying to listen to how it arrived at its verdict.
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