Financial Focus

With immediate effect, the government has placed a guarantee on all bank deposits of individuals and corporations in Singapore. The guarantee, which runs until December 31, 2010, will cover all local and foreign currency deposits in banks, finance companies and merchant banks. This guarantee however, does not include any structured deposit or any deposit which is pledged, charged or secured as collateral. This guarantee is backed by $150 billion worth of government reserves.

From 1 Sep '08, pregnancy complications of the mother and congenital abnormalities of the child, subject to waiting periods of 10 mths and 24 mths respectively, will be added to the NTUC's Incomeshield as-charged and limited plans.

Specifically, Ectopic Pregnancy, Pre-Eclampsia or Eclampsia, Disseminated Intravascular Coagulation (DIC), Miscarriage, or Termination of a pregnancy deemed necessary to save the life of the mother requiring in-patient treatment will be covered.

Previously such coverage under Medisave-approved plans by private insurers were only available through Great Eastern and Prudential.

This should be well-received as this widens the choice for couples who are considering family planning.

In addition, the popular IncomeShield Rider Plus plan which covers 100% of the co-insurance and deductibles will be withdrawn from the market and only existing policyholders can choose to continue with it at revised premium rates of about $5-$10 more per month. The rider will be replaced by Assist Rider which covers the deductible and caps the co-insurance to a maximum from $1,500(Plan C) to $3,000 (Plan P).

The move strongly advocates that health insurance should not fully cover charges as it encourages over-consumption, a stand that close competitor Aviva has firmly held on to from the onset of their shield plan offering.

From 1 June 08, all motor accidents have to be reported to the insurance company within 24 hours of occurrence or by next working day.

The insurers will do the rest, from arranging for a replacement vehicle to making third-party claims. Should you fail to report promptly to your insurer, your claims may be prejudiced or even declined by your insurer.

There is a penalty of deduction of 10% on the No Claim Discount (NCD) upon renewal of your policy. Even if you are new driver with no NCD given, you may not be awarded NCD in the subsequent years.

 You should also report to the police within 24 hours if:

• There is damage to a government vehicle or property.

   

• It involves a foreign-registered vehicle.

   

• It involves a foreign-registered vehicle.

   

• It involves a hit-and-run incident. 

   

 In case of accident, you should

• Exchange particulars of involved parties including Name, NRIC/FIN, Telephone Number, Address and Insurer. Take note of the vehicle numbers and take digital photographs of the accident vehicles and accident scene.

   

You can send the digital photos via MMS to 97112758 (GIARMC: General Insurance Association Report Management Centre) on the vehicle number and date of accident in the format is , .

• Call your insurer?s hotline for a tow truck or for further advice on the accident. Avoid all unauthorized tow-truck operators or repair workshops.

   

• Report and bring your accident vehicle (whether damaged or not) to the approved reporting centre/authorized workshop within 24 hours or by next working day. The centre/workshop will help to fill up the Singapore Accident Statement forms.

   

This move is seen by many to be effective to tackle the inflated claim by the motor car workshop. In simple cases, lawyers will be kept out of the disputes as far as possible to contain the cost. Furthermore, non-injury motor claims disputes below $1,000 will now be addressed out of court - by the Financial Industry Disputes Resolution Centre (Fidrec).

From 1 Dec 08, Singaporean can expect their big hospital bill in B2/C wards to be covered by MediShield Scheme by up to 80%, up from the current 60% cap. This of course, comes with increase in premium, from less than $1 to $40 per month increase in premium. The new premium is shown in the table below.

The annual Medisave withdrawal limit will be raised to $1,150 for policyholders who are above 80 years old, while it still remains at $800 for the rest of the policyholders. Also, the Government will also be topping up the Medisave accounts in September 08 for those above 50 years old, which range from $150 to $550. The enhanced coverage for MediShield can be found at MOH website here.

The above is definitely good news for those policyholders who has pre-existing illness covered by MediSheild originally, but not by their enhanced Medisave-approved private Shield Plan.

With effect from 1 April 2008, Work Injury Compensation Act (WICA) replaces the Workmen's Compensation Act (WCA). The current scope only covers manual workers and non-manual workers earning less than $1,600 per month. The scope is now widened to cover non-manuals workers earning above $1,600 per month.

Though buying insurance for this group of workers is not compulsory, employer is still liable for the compensation if a valid claim arises. The minimum and maximum to the claim for death and Permanent Incapacity for all workers are as follows:

The Act covers all employees engaged under a contract of service or apprenticeship, regardless of their level of earnings.

Self-employed persons, independent contractors, domestic workers, members of the Singapore Armed Forces, officers of the Singapore Police Force, the Singapore Civil Defence Force, the Central Narcotics Bureau and the Singapore Prison Service are not covered by the Work Injury Compensation Act.

Compensation is payable when an employee suffers personal injury by accident arising out of and in the course of his employment. An accident arising in the course of an employee's employment (i.e. during working hours or while on official duties) is regarded as having arisen out of that employment, unless there is evidence to prove otherwise.

Compensation is also payable under the following circumstances:

• An employee meets with an accident while traveling as a passenger to and from his place of work in a vehicle operated by or on behalf of his employer and the vehicle is not a public transport.

   

• An employee who is residing in Singapore and employed by an employer in Singapore, meets with an accident in a place outside Singapore where he is required to work.

   

Under the Work Injury Compensation Act (WICA), an injured employee is entitled to claim medical leave wages, medical expenses and compensation for permanent incapacity or death, if applicable.

Employers are liable to pay work injury compensation as follows:

·         Medical Leave Wages

·         Medical Expenses

·         Compensation for Permanent Incapacity

·         Compensation for Death