Forum: Insurance firms have power to change contract terms even before policy renewal

I refer to the article "Issues that need attention in health insurance review" (April 16) by The Straits Times' senior health correspondent Salma Khalik.

The article stated that "currently, subject to MOH (Ministry of Health) approval, insurers can change the contract each time a policyholder renews the policy - which is annually - because the principle is that each renewal means the person is signing a new contract".

I believe this is not the case - at least not for the AIA Integrated Shield Plan (IP) policies which I am most familiar with (I have not checked the contracts of the other IP providers).

The standard AIA contract states clearly that the insurer can vary the premiums, benefits and/or cover or amend any privilege or condition of the policy by giving policyholders 31 days' notice at their last known address, provided that such changes apply to all policies within the same class of insurance.

AIA exercised this right last April, when it sent an ad hoc letter to all policyholders, to inform them of some significant changes to the policy that would be made effective on June 1 last year.

In essence, a $2 million cover was reduced to $70,000 for certain conditions.

All AIA policyholders were affected by this change in June last year, through this letter, even while their policy was in force.

I am not sure how many policyholders noticed this drastic and significant change, but the public should be aware that insurers have powers not accorded to policyholders.

Cindy Teo Yan Har