Frequently Asked Questions
Policy Owners’ Protection
The Policy Owners’ Protection (PPF) Scheme protects policy owners in the event a life insurer which is a PPF Scheme member fails. The PPF Scheme provides 100 per cent protection for the guaranteed benefits of your life insurance policies, subject to caps where applicable. For example, for individual life and voluntary group life policies, there are aggregate caps applicable, namely S$500,000 for the guaranteed sum assured and S$100,000 for the guaranteed surrender value per life assured per insurer.
All members of the Life Insurance Association are members of the PPF Scheme. In the event that a PPF Scheme member fails, the Monetary Authority of Singapore (MAS) will decide whether to activate the PPF Fund and whether the PPF Fund would be applied in termination or transfer or run-off of the business of the failed insurer. MAS will then request the Singapore Deposit Insurance Corporation (SDIC) to step in. Accordingly, SDIC will make announcements to all policy owners of that PPF Scheme member through the media and provide the details on how their policies would be affected.
While Monetary Authority of Singapore (MAS) seeks to maintain the stability of the financial system in Singapore, it does not aim to prevent the failure of any financial institution. Regulation or supervision cannot completely prevent losses without making it impossible for life insurers to operate effectively. Therefore, the PPF Scheme provides a safety net for policy owners. The PPF Life Fund will alleviate financial distress to policy owners in the event their life insurer fails. Policy owners will have greater certainty as to how much of their policy moneys will be protected and whether the losses they have suffered for insured risks will be compensated should their life insurer fail. Experience in other jurisdictions has shown that if you have a mechanism in place to guarantee the safety of life insurance policies, people are less likely to panic if and when things go wrong.
For more information, go to the SDIC website.