As highlighted in the Life Insurance Association Singapore press release of June 26, while MediShield Life is expected to reduce claims payout from the top-up portion of Integrated Shield Plans (IPs), claims from IPs have increased since the last pricing review in early 2013 ("IP insurers should pass on savings to consumers"; Tuesday).

For IPs targeting public hospital Class A/B1 wards, the reduction in claims payout from the top-up portion is expected to offset the effect of claims escalation since the last review.

As for IPs targeting private hospital wards, the reduction in claims payout from the top-up portion will not be sufficient to cover the effect of claims escalation.

However, despite the expected shortfall, we remain committed to not increasing the premiums for the top-up portion of all IPs for 12 months, following the implementation of MediShield Life. This is part of the life insurance industry's efforts to facilitate a smooth transition for all IP policyholders.

IP insurers recognise the importance of actively managing the claims experience of IPs, especially for IPs covering private hospital treatments.

IP insurers will also continue to engage all stakeholders to better manage claims costs and keep IP premiums affordable for all.

Pauline Lim (Ms)

Executive Director

Life Insurance Association Singapore