Out-Law News | 10 Oct 2014 | 1:00 pm | 1 min. read
MAS said in a consultation paper that it proposes changes to the Financial Advisers Act and Insurance Act as part of its Financial Advisory Industry Review (FAIR).
The FAIR proposals will also create “a more competitive market for insurance products and empower consumers to make informed decisions through better access to information”, MAS said.
MAS said it had already discussed the proposed measures with industry and consumer groups and had made “good progress” with a number of initiatives, including direct purchase life insurance products where consumers can purchase directly from insurers without paying a commission.
MAS announced the features of direct purchase products last July. “Life insurance companies are currently developing these products and putting in place the infrastructure and processes in preparation for their launch in early 2015,” MAS said. MAS said it is also working closely with life insurance companies to provide “safeguards” for consumers purchasing products without financial advice.
In addition, a new web site being developed for an expected launch in the first quarter of 2015 will allow consumers to compare the features and costs of life insurance products, MAS said.
A “balanced scorecard framework” is also being developed, so that the income of those working in the financial advisory sector is linked to “key performance indicators that are not related to sales”, such as providing suitable product recommendations and disclosing material information to customers. Failure to do so would “affect variable income”, MAS said.
Under the proposals, those working in the financial advisory sector would have a one-year grace period to familiarise themselves with the framework before the requirements become law in January 2016.
MAS said it aims to implement all of its FAIR initiatives in 2015, although the industry would be given “sufficient transition time to put in place systems and processes to comply with the requirements”.
The assistant managing director of capital markets for MAS Lee Boon Ngiap said regulators will “look to the boards and senior management of financial institutions to set the right tone and promote a culture of fair dealing in their companies”.