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<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>Policyholders in the dark on how bonuses, dividends are calculated
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I AGREE with Ms Lorna Tan ('Insurance funds need more transparency', July 31) and Mr Larry Haverkamp ('Policyholders underpaid?', Aug 6) on the urgent need for more transparency in insurance. At the moment, there is no way for policyholders, on their own, to verify the quantum gain or loss from investments made by insurance companies, much less the formula they use to derive bonuses and dividends (both annual reversionary and terminal).
I received a letter from AIA on July 18 last year informing me of the projected maturity proceeds of my policy, maturing this month. The accumulated reversionary bonus and bonus for 2008 were also listed separately.
Just one year later on July 19, I received another letter advising me that AIA would credit my maturity proceeds to my account on my maturity date of Aug 1. This indicated a shortfall in my terminal bonus of up to 24 per cent, while reporting a slight increase in reversionary bonus for 2009.
Since both reversionary and terminal bonuses depend on the investment outcome, why should they move in opposite directions? I wrote to AIA a letter dated July 22 seeking clarification on the discrepancy, but it has yet to be answered despite several calls to the customer service hotline.
On Aug 5, I received a letter from AIA dated July 29 confirming payment of my maturity proceeds and indemnifying itself against further claims on the policy. Since I paid the premiums for this policy with my CPF money, the proceeds were paid directly to my CPF bank account, giving me no chance to reject the payment. I have since made a written report to AIA, reserving my right to further claims.
In short, if I had not noticed the discrepancy in the movements between the reversionary and terminal bonuses, I, like other policyholders, would have no choice but to accept the company's claim that the shortfall in terminal bonus was due to poor investment earnings.
Meanwhile, my case implies that AIA does not use 'orphaned funds' to smoothen the terminal bonus payouts, considering that many of its policyholders prematurely surrendered their policy last year, thus gorging the company with 'orphaned funds'.
Lim Khay Teg
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->I AGREE with Ms Lorna Tan ('Insurance funds need more transparency', July 31) and Mr Larry Haverkamp ('Policyholders underpaid?', Aug 6) on the urgent need for more transparency in insurance. At the moment, there is no way for policyholders, on their own, to verify the quantum gain or loss from investments made by insurance companies, much less the formula they use to derive bonuses and dividends (both annual reversionary and terminal).
I received a letter from AIA on July 18 last year informing me of the projected maturity proceeds of my policy, maturing this month. The accumulated reversionary bonus and bonus for 2008 were also listed separately.
Just one year later on July 19, I received another letter advising me that AIA would credit my maturity proceeds to my account on my maturity date of Aug 1. This indicated a shortfall in my terminal bonus of up to 24 per cent, while reporting a slight increase in reversionary bonus for 2009.
Since both reversionary and terminal bonuses depend on the investment outcome, why should they move in opposite directions? I wrote to AIA a letter dated July 22 seeking clarification on the discrepancy, but it has yet to be answered despite several calls to the customer service hotline.
On Aug 5, I received a letter from AIA dated July 29 confirming payment of my maturity proceeds and indemnifying itself against further claims on the policy. Since I paid the premiums for this policy with my CPF money, the proceeds were paid directly to my CPF bank account, giving me no chance to reject the payment. I have since made a written report to AIA, reserving my right to further claims.
In short, if I had not noticed the discrepancy in the movements between the reversionary and terminal bonuses, I, like other policyholders, would have no choice but to accept the company's claim that the shortfall in terminal bonus was due to poor investment earnings.
Meanwhile, my case implies that AIA does not use 'orphaned funds' to smoothen the terminal bonus payouts, considering that many of its policyholders prematurely surrendered their policy last year, thus gorging the company with 'orphaned funds'.
Lim Khay Teg
