Who is checking on the insurers?

I paid a visit to the Competition Commission of Singapore's office in Maxwell Road yesterday (April 3) and spent an interesting one hour with four of its officials discussing the motor insurance industry.

The meeting was sparked by my query whether the industry was acting like a cartel after I was told that my wife's no-claims discount would be cut if she were to move to another insurer after she had made a claim for damages after an accident.

Her policy has a no-claims bonus (NCB) protection plan. To continue enjoying the 50% discount, she would have to stay put with the same insurer. Staying put also means that there was nothing she could do about the size of premium increase she would have to pay.

At the end of the session, the CCS bottomline was: No, the industry was not acting like a cartel because the NCB discount is not portable after a claim has been made. Also, every insurer could set its own premium and therefore there is no collusion.

However, I could sense among the motorists present at the meeting a feeling of unhappiness with what's going on in the industry. Which, as anyone could guess, is no different from the sentiments of 99% of the motoring public here.

I think the right word to describe the prevailing situation is "helplessness" -- the insurers simply increase your premiums whether or not you have made a claim and there is very little you can do about it.

All the insurers need to do to "justify" their action is to repeatedly chant, "We have lost millions the previous year, so premiums have to go up."

Question time: * Who in authority is verifying what the insurers are claiming? * Are all the insurers losing money or it is just a few of them?* If some of them are not losing money, what is the justification for imposing all-round increases in premiums? * Shouldn't the authorities be checking and supervising more closely?

I suggest whoever in authority reading this should make it point to read what my retired insurance friend has to say in his posting, "Wise words from a veteran in the insurance industry".

Free market does not work if there is no transparency and a sense of responsibility.