Singapore, 7 May 2024

The Singapore Actuarial Society Health Committee (“SAS HC”) published a discussion paper today to promote public discourse on the portability of Integrated Shield Plans (“IPs”) and associated riders.

Advocates for more relaxed portability rules posit that existing rules are unfair to policyholders who deserve flexibility to seek better coverage or lower prices for themselves. The paper highlights that portability rules that require an insurance plan to accept a policyholder that may be expected to claim more from the plan than what is implied in the premium rate, could result in increased premium rates for incumbent policyholders of the plan. Fairness of such premium increase from the perspective of the incumbents – over 80% of them being the “silent majority” who have not made a claim in the past year – should be adequately considered.

This paper does not advocate for a specific set of portability rules. Instead, the paper presents several perspectives of what is deemed fair along the continuum of possible beliefs amongst the insured public who wanted more flexibility – as well as potential unintended consequences that may result if the impact of changes are not properly understood.

  • At one end of the continuum, one may believe that access to health insurance, without restraint on coverage, is a basic right of the population, regardless of health condition. One may therefore accept a much higher premium increase to ensure that nobody is permanently denied insurance coverage. For any condition, a time-bound exclusion may be imposed at entry into the IP ecosystem or at the time of any switching of plans. Also, incentives may be required to ensure subsidies remain for healthy lives within the higher premium environment. This more communal philosophy is akin to that seen in Australia.
  • At the other end of the continuum, one may believe that the existing rules are largely fair when it comes to how risks are shared between policyholders of different risk profiles. As Integrated Shield Plans are largely similar in features between providers, allowing free switches without changes in the terms and conditions of insurance may reduce the prevailing price differentiation between insurers. However, allowing free switches increases the uncertainty of the level of risk which each insurer is exposed to, whether it is the insurer which is switched from or the one which is switched to. This may lead to higher premiums. Current rules continue to apply for switching of riders.

It may seem appealing to introduce significantly relaxed portability rules first, and then manage the resultant premium increases along the way. However, healthcare remains a supply-driven system today. More services, or more expensive services, may be consumed when insurance causes policyholders to feel they can afford it. As Singapore has learnt from the introduction of the “as charged” concept into IP, a popular product feature can lead to painful premium increases in the long run; and scaling back a feature that the population is used to is unpleasant.

Alex Lee, President of SAS, said “Fairness is in the eyes of the beholder. The perception of fairness of portability rules may differ between someone who actively upkeeps their health and someone whose family members have developed medical conditions since their IP purchases. Ultimately, behaviour of anyone in the plan will affect the experience of everyone else in the plan. The SAS believes that, through dialogue involving members of the public from diverse backgrounds, Singapore can build consensus in the community about what kind of portability rules best fit the Singapore context.”

For more details, please refer to the discussion paper here.


About Singapore Actuarial Society
The SAS was founded in 1976 and as the recognised representative body of the actuarial profession in Singapore, SAS has the final authority in setting professional standards.
SAS’ objectives are to:

  1. Set and uphold high professional standards among members;
  2. Further the professional development of members;
  3. Serve the public interest by promoting the study, discussion, publication and research into the application of actuarial, economic, financial and statistical principles to practical problems related to insurance, retirement benefits, finance and investment, risk management and other fields where such principles can be applied, with particular reference to Singapore and the ASEAN region;
  4. Assist members during actuarial studies; and
  5. Foster and encourage social relationship among members

SAS provides its 1,000+ community with many opportunities and linkages to other Asian and global actuaries, including opportunities to work collegially on cutting edge regulatory, industry and public interest issues. Through our many forums, events and the annual flagship conference, the Singapore Actuarial Conference, we showcase and feature world renowned speakers combining different actuarial practice areas with an international focus in Life Insurance, General Insurance, Data Analytics, ERM and Retirement.

Serving the public and the actuarial profession is in SAS’ constitution and the SAS aims to build long lasting relationships with government agencies through regular touchpoints and relationships at senior levels. We have built working relationships with the Singapore financial regulator - the Monetary Authority of Singapore (MAS), Ministry of Health (MOH), and Ministry of Manpower (MOM).

SAS’ engagements with government agencies include providing commentary on policy changes, advising government agencies on insurance-related topics, regulation and professional actuarial standards.

On the international front, SAS is a Full Member of the International Actuarial Association (IAA) and has active representatives to contribute to various IAA committees. Notably, the SAS currently has representatives in the IAA Council and the Strategic Planning Committee, on top of several sections and task forces.

Media Contact
Singapore Actuarial Society
Mazuin Roslee
Planning and Digital Manager
Mobile: +65 91314551