, Singapore
98 views

Singapore life insurers to lower caps on policy illustrations

The upper illustration rate will be capped at 4.25% p.a. and the lower rate at 3% p.a.

The Life Insurance Association, Singapore (LIA) has announced that the sector will reduce the caps of illustrative investment returns used in policy illustrations (PI) for Singapore-dollar denominated participating (Par) policies, effective 1 July 2021.

Life insurers are now expected to draw at least two scenarios, namely an upper investment return scenario and a lower investment return scenario to allow for a reasonable potential range of the level of benefits. 

The upper illustration rate will be capped at 4.25% per annum and the lower illustration rate will be capped at 3% p.a., with the latter must be at least 1.25% p.a. below the upper illustration rate. 

In addition, illustration rates should not be higher than the insurer’s view of the investment returns achievable over the lifetime of Par policies. The upper illustration rate should also not exceed the 4.25% p.a. cap.

These rates are for illustrative purposes only and will not affect actual returns of existing and future Par policies, assured LIA president Khor Hock Seng. The rates also do not represent the upper and lower limits of the investment performance of an insurer’s Par fund.

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Get Insurance Asia in your inbox
The training market is adjusting through rehashing their portfolios.
Premium growth was driven by the low base effect plus growth in the health segment.
Training programmes are being offered especially on entry-level skills.
This is to ensure that troubled financial institutions won't end up needing costly bailouts.
The academy helps financial professionals accelerate their careers.
It is expected to post a 3-4.5% marginaL ROE due to investment income.
Hong Kong citizens who have received at least one vaccine dose can join.
Pandemic-induced mortality losses will remain small.
It will require project owners and operators to compensate environmental damages.
Long-term insurance revenue premiums declined 5.2%.
The 12.5% jump in cover shows good value amidst a challenging market, it said.
Singapore's GIC led the funding, investing $182m (INR6b).
The upper illustration rate will be capped at 4.25% p.a. and the lower rate at 3% p.a.
Only Dai-ichi Life posted higher core profit.
Ten insurers have invested in 47 community care projects.