Debated in Parliament on 21 Oct 2013.
Er Dr Lee Bee Wah asked the Acting Minister for Manpower (a) whether the Ministry will consider extending the mortgage insurance cover under the Home Protection Scheme (HPS) to HDB flat owners with pre-existing illnesses; (b) how many HPS applications have been rejected in the past three years; and (c) how many claims have been made under HPS during this period.
Mdm Speaker, the Home Protection Scheme (HPS) is a mortgage-reducing insurance which provides protection to CPF members and their families against the risk of losing their HDB flats, in the event of the CPF member's premature death or permanent incapacitation. From 2011 to July 2013, about 2,700 HPS claims with a total value of $221 million have been paid out to insured members to help them pay off their outstanding housing loans. This is an important scheme and it is put in place to look after Singaporeans, and is something that will continue to be applied for all Singaporeans.
However, HPS is not offered to CPF members with serious pre-existing medical conditions. About 1.3% of all HPS applications since 2011 were rejected due to serious pre-existing medical conditions.
Extending HPS coverage to all CPF members with pre-existing medical conditions would have implications on the affordability of premiums for members and the viability of the HPS, and there are significant moral hazard issues that need to be addressed.
These issues and concerns are not unique. These are the same concerns and considerations that apply to every insurance programme and every insurance scheme. So, these issues need to continue to be carefully studied. We understand the concerns raised. But we do understand that CPF members with serious pre-existing illnesses and their families would be concerned about the repayment of the outstanding loans for their HDB flats in the event of death or permanent incapacitation of the member. Various assistance schemes are available to help those members. CPF Board will also work closely with the
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Ministry of National Development to study other options to help them as well.
Mdm Speaker, I would like to know how many percent of flat buyers take up HPS and whether there will be further publicity so that more will take up HPS because it is for their own good. Will the Ministry consider making this compulsory?
Mdm Speaker, as at July 2013, there are about 530,000 CPF members using CPF to service their monthly housing instalments. Of these, 95% are covered by HPS or an equivalent MRI. About 2% have lapsed on the HPS premiums while 3% are uninsurable or ineligible for HPS cover.
We understand the concern raised by the Member as to whether we should raise the profile and information. Public education is something that we can continue to do. It is important for the public to understand the importance of HPS. It is about protecting their families and their loved ones. In terms of whether we should make this compulsory, this is something that regularly pops up as to whether it is something we should look at as part of the overall review into how better to look out for our people, some of whom may not be covered or to encourage more people to be covered. That is something we can consider.
PAPERCUTS