Financial advisers' association pushes for guidelines on insurance commission rebates

THE Association of Financial Advisers (Singapore), or AFA(S), has urged the Monetary Authority of Singapore to take a closer look at the way in which commission rebates for life insurance policies are carried out in the industry.

AFA(S) president Vincent Ee stressed the importance of having guidelines on how such rebates should be carried out so that they are ethical and proper.

He noted that while commission rebates lower policy premiums and benefit consumers, such incentives if carried out improperly could induce overbuying of insurance policies.

It is not good enough to say that it is not prohibited and that the financial advisory firms just have to do it without creating an inducement for consumers, Mr Ee said on Thursday.

"Perhaps life insurance companies can create a model where commission rebate is done all at company level so that it is reflected truly in the pricing and in the premiums," he added.

Mr Ee was speaking at the two-day AFA(S) Annual Conference 2015 that ends today.