SUPPLEMENTARY NOTES. Personal General Insurance (4 th Edition) Date Of Issue: 1 October 2014

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1 SUPPLEMENTARY NOTES Personal General Insurance (4 th Edition) Date Of Issue: 1 October 2014 The following amendments have NOT been incorporated in the Study Guide. They should be marked up in the Study Guide immediately. For examination purposes, the following amendments will take effect from 1 December 2014: 1. Chapter 6, Section 5, Page 200 To replace Section 5 with the following: 5. CRITICAL ILLNESS INSURANCE A Critical Illness (also known as Dread Disease) policy is an insurance product designed to provide a lump sum benefit to a policyholder/life insured in the event that he is diagnosed to be suffering from one of the critical illnesses or has undergone a surgical procedure covered under the policy. Each critical illness condition or surgery covered by the policy is precisely defined in the policy, and benefits will be paid only if he suffers a condition that meets the standard definition as specified in the policy. Critical Illness Insurance policy can be sold as a stand-alone policy (individual or group basis), or as an optional rider to a Whole Life, Endowment, Term Insurance or Investment-Linked Policy, to provide either an additional sum assured or the advanced payment of a portion, or the entire sum assured payable on death. Before 1 August 2014, Critical Illness Insurance policies/riders could only cover a maximum of 30 out of the 37 severe critical illnesses in accordance with a list of common definitions of critical illnesses as specified jointly by the Life Insurance Association of Singapore (LIA) and General Insurance Association of Singapore (GIA). This is for insurers in Singapore to select the types of critical illnesses, which they wish to insure and sell for their Critical Illness Insurance policies, and these can vary from insurers to insurers. From 1 August 2014, critical illness benefits offered under new individual or group insurance policies may be launched with two changes: (i) (ii) Revised standardised definitions of the 37 severe critical illness - The 37 critical illnesses listed in Appendix 6M (Version 2013 list since 1 July 2003) has been replaced by Appendix 6P - Version 2014 (1 August 2014) for insurers to adopt. These definitions, referred to in Appendix 6P, are set by LIA to provide consistency for policyholders. Details of these definitions are specified in the LIA Website at: Flexibility for more medical conditions to be covered - Insurers not only can offer Critical Illness (CI) Insurance policies covering beyond 1

2 37 (30 previously) critical illnesses, but also can offer single-illness CI plans. For each insured medical condition, subject to the adoption of the common definitions, there will be no restrictions on how many stages and what the stages of illness progression to be covered by insurers. Definitions for additional CI not covered by the 37 standardised definitions will be set by individual insurers. CI products using the old definitions will no longer be sold from 15 February In recent years, there were a number of innovations on critical illness cover. These include severity-based critical illness (also known as early pay CI) and multiple pay critical illness policies which we will discuss in greater detail in a later section of this chapter. 2. Chapter 6, Section 5.1, Page 200 To replace Section 5.1 bullet point (d) with the following: (d) Meets Definition Of Critical Illness The definitions of the various critical illnesses as specified in the policy forms an extremely important part of the policy, as they will determine whether a claim is payable. It is important that you take some time to explain to your prospective client, and ensure that your prospective client understands that the benefits will be paid only if the disease qualifies and meets the definition as specified in the policy. Let us look at one of the definitions, namely Major Cancers, to show you below how you should explain the definition of the various critical illnesses to your prospective clients. Major Cancers A malignant tumour positively diagnosed with histological confirmation and characterised by the uncontrolled growth of malignant cells with invasion and destruction of normal tissue. The term malignant tumour includes leukemia, lymphoma and sarcoma. This diagnosis must be supported by histological evidence of malignancy and confirmed by an oncologist or pathologist. From the above definition, the following are excluded: All tumours which are histologically classified as any of the following: - Pre-malignant; - Non-invasive; - Carcinoma-in-situ; - Having borderline malignancy; - Having any degree of malignant potential; - Having suspicious malignancy; - Neoplasm of uncertain or unknown behavior; or - Cervical Dysplasia CIN-1, CIN-2 and CIN-3; Any non-melanoma skin carcinoma unless there is evidence of metastases to lymph nodes or beyond; 2

3 Malignant melanoma that has not caused invasion beyond the epidermis; All Prostate cancers histologically described as T1N0M0 (TNM Classification) or below; or Prostate cancers of another equivalent or lesser classification; All Thyroid cancers histologically classified as T1N0M0 (TNM Classification) or below; All tumours of the Urinary Bladder histologically classified as T1N0M0 (TNM Classification) or below; All Gastro-Intestinal Stromal tumours histologically classified as T1N0M0 (TNM Classification) or below and with mitotic count of less than or equal to 5/50 HPFs; Chronic Lymphocytic Leukaemia less than RAI Stage 3; and All tumours in the presence of HIV infection. As can be seen from the above specification, it does not mean that, so long as the life insured being diagnosed to be suffering from cancer, he can make a critical illness claim under his policy. The reason for these technical definitions is to ensure that claims are paid when they are most needed in respect of severe illnesses, and not for relatively minor illnesses. As the definitions can be very technical, you may have difficulties explaining them to your prospective clients. In such a case, it is advisable that you approach your underwriter or claims manager, with the request for your company to provide you with adequate training in this area. 3. Chapter 6, Appendix 6P (NEW) To insert new Appendix 6P (found in Annex A of this Supplementary Notes) after page 256 of the Study Guide. Date of Issue: 31 July 2014 For examination purposes, the following amendments took effect from 1 October 2014: 1. Chapter 1, Section 3.2, Page 8 To replace the second paragraph with the following: The Certificate of Insurance is no longer required to be produced when renewing one's road tax (motor vehicle licence) online at the LTA Portal, AXS Station or inets Kiosk, as the insurer concerned transmits the relevant information online to LTA on a daily batch basis. However, the Certificate of Insurance still needs to be produced when renewing the road tax at any of the LTA authorised Road Tax Collection Centres. 3

4 Date of Issue: 14 January 2014 For examination purposes, the following amendments took effect 14 March 2014: 1. Chapter 1, Section 7.5, Page 36 To replace the entire section with the following: The important change in procedure concerning third-party property damage claims came into effect on 1 May It requires motorists making such claims to give the potential defendants or their insurers an opportunity to inspect the damage to their motor vehicles, before the commencement of repairs. The potential defendant s insurers, upon receipt of notification on the location of the damaged motor vehicle, will conduct a pre-repair inspection on the damaged motor vehicle within two working days from the time of notification, excluding Saturdays, Sundays and public holidays. However, if the potential defendant s insurer has waived the requirement for the pre-repair inspection, the claimants may proceed with the repairs. Under the Sub Courts Protocol, the potential defendant or his insurer will also have to compensate the claimant for loss of use of the motor vehicle for the period of the pre-repair inspection. The requirement for pre-repair inspection is meant to improve transparency in the submission of third-party damage claims by third-party workshops on behalf of the owner of the motor vehicle. This helps all parties involved to agree on the extent of the damage and the necessary scope of the repair to be done, as well as it helps to expedite the settlement of third-party claims. Such a requirement also acts as a deterrent against parties involved from making unnecessary repairs and/or inflating the claims in an unjust manner, thus preventing possible fraud in the process. 4

5 Annex A To Supplementary Notes Personal General Insurance (4 th Edition, 2013) Date Of Issue: 1 October 2014 A1

6 Personal General Insurance Appendix 6P COMMON DISEASES COVERED UNDER CRITICAL ILLNESS INSURANCE POLICIES Industry List Of 37 Critical Illnesses: 1. Major Cancers 2. Heart Attack of Specified Severity 3. Stroke 4. Coronary Artery By-pass Surgery 5. Kidney Failure 6. Aplastic Anaemia 7. End Stage Lung Disease 8. End Stage Liver Failure 9. Coma 10. Deafness (Loss of Hearing) 11. Heart Valve Surgery 12. Loss of Speech 13. Major Burns 14. Major Organ / Bone Marrow Transplantation 15. Multiple Sclerosis 16. Muscular Dystrophy 17. Parkinson s Disease 18. Surgery to Aorta 19. Alzheimer s Disease / Severe Dementia 20. Fulminant Hepatitis 21. Motor Neurone Disease 22. Primary Pulmonary Hypertension 23. HIV Due to Blood Transfusion and Occupationally Acquired HIV 24. Benign Brain Tumour 25. Viral Encephalitis 26. Bacterial Meningitis 27. Angioplasty & Other Invasive Treatment For Coronary Artery 28. Blindness (Loss of Sight) 29. Major Head Trauma 30. Paralysis (Loss of Use of Limbs) 31. Terminal Illness 32. Progressive Scleroderma 33. Apallic Syndrome 34. Systemic Lupus Erythematosus with Lupus Nephritis 35. Other Serious Coronary Artery Disease 36. Poliomyelitis 37. Loss of Independent Existence Source: LIA Website: LIA Critical Illness Framework 2014 Standard Definitions for Severe Stage of 37 Critical Illnesses: Version 2014 A2 Copyright reserved by Limited