Debated in Parliament on 10 Sep 2018.
Mr Kwek Hian Chuan Henry asked the Minister for Health (a) whether CareShield Life is subjected to the Insurance Act; and (b) if not, how will the Government ensure that the premiums collected are properly managed and payouts made available when claims arise.
CareShield Life will not be subject to the Insurance Act as it will be administered by the Government.
However, the Government will ensure that CareShield Life is managed in line with relevant regulatory requirements that the Monetary Authority of Singapore sets for private insurance companies, including measures to ensure solvency. This is similar to how the MediShield Life scheme is managed today.
To ensure the proper governance of premiums collected for CareShield Life, the Government intends to enact new legislation for CareShield Life in 2019. The new CareShield Life legislation will provide for the setting up of a CareShield Life Fund. All CareShield Life premiums collected, along with any investment returns from these premiums, will remain entirely within the Fund. The Fund will be used solely for the benefit of policyholders. It will be audited annually and the financial accounts made public to ensure that all the monies are accounted for.
In addition, the Government also intends to legislate the setting up of an independent council to provide advice on the administration of the CareShield Life scheme. The Council will regularly review and recommend changes in premiums and payouts, in accordance with an actuarially sound adjustment framework. If claims are higher than projected, the Council could recommend raising premiums or slowing down payout increases. Conversely, if claims are lower than expected, the Council could recommend payout increases, slower premium increases, or to return surpluses to policyholders as premium rebates. This legislated arrangement will help safeguard the long-term sustainability of the Fund.
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