By Gabriel Chen

THE Monetary Authority of Singapore (MAS) is looking to improve the disclosure of charges on insurance products so that consumers can know exactly how much of their premiums go towards protection coverage.

MAS executive director for insurance supervision, Mr Low Kwok Mun, said yesterday that the central bank wanted to give policyholders a better idea of precisely how much each component of their policy - protection, investment or savings - costs them.

Speaking at the Life Insurance Association's (LIA) annual luncheon, he said MAS' aim was to achieve 'clearer delineation' between insurance products and the pure savings or investment products sold by banks and other financial institutions.

This would help avoid consumer confusion, he said.

Mr Low claimed that many insurance products were designed and marketed in a way that meant consumers often lacked sufficient information about what proportion of their premium went towards protection coverage.

'As a result, policyholders are not able to make a cost-benefit assessment of the protection they have purchased,' he said.

'Indeed, some may even think that their protection needs are adequately covered just because they have purchased an insurance product, when in fact the protection element is very small.'

He explained that the need for such 'enhanced disclosure' was especially important, given the introduction of insurance products with little protection coverage.

'These products are usually sold as single-premium non-participating policies with short tenures,' he added.

Newly elected president of the LIA, Mr Tan Hak Leh, welcomed MAS' move to tighten disclosure rules, adding that providing consumers with more product information was 'something we are glad to do'.

Mr Tan, the current managing director of Great Eastern Life, stepped into his new LIA role following a one-year stint as the LIA's deputy president.

In his first speech as LIA president, he said he planned to focus on promoting protection coverage and long-term savings, as well as raising industry standards.

For the first time in its history, the LIA has elected two deputy presidents - Mr Philip Seah, chief executive of Prudential Assurance, and Mr Neal Armstrong, general manager of Zurich International Life's Singapore office.