Dear Mr. Tan,
My company had a Workmen Compensation Insurance Policy with X. In a letter to my company dated about 1 month before the expiry (but in fact posted late as I only received it only 2 weeks before the expiry), X said that they will not renew the policy any more.
On checking with my agent, I found that the X's new practice requires my company to buy "fire and theft" insurance with premium of 100% more than the premium for "Work Injury Compensation" (new name for "Workmen Compensation) before it can be accepted.
My questions are as follows:
a) If X changed it practice, why was it communicated so late to its existing customer?
b) If the claims for "Workmen Compensation" was high, why did it not raise the premium for this cover, instead of forcing the customer to buy other policies?
c) Why does the Ministry of Manpower allow this to happen?
d) Is X using its strong market position to unfairly?
After all, this "Work Injury Compensation" system is mandated by MOM. MOM should settle some of these ground rules so that the system can operate in an efficient and fair way. MOM cannot say "let market forces decide" because it is not a completely free market with many buyers and many sellers but a market with many small buyers who are "forced" to buy something and a small number of big sellers)
HW
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