Sterling Knight COO Blog

New Work Injury Compensation Bill Increases Statutory Liability of Employers

The Ministry of Manpower recently published details of the Work Injury Compensation (Amendment) Bill 2011, which is scheduled to come into effect 1st June 2012. I summarize the main points we feel are relevant to employers in Singapore and their insurers. I also comment on best practice for insurance arrangements, given the new law.

Salient points of the Bill which will impact employers:

1. Statutory no fault limits under the Work Injury Compensation Act will be increased to SGD170,000 for death and SGD218,000 for permanent incapacity. The current limits are SGD140,000 for death and SGD180,000 for permanent incapacity. This is to account for wage inflation since the last amendment in 2008. Also, in a similar vein, the medical expenses limit will be increased to SGD30,000 (currently SGD25,000).

2. Scope of Work Injury Compensation for occupational diseases extended. Specifically, work related injuries as a result of exposure to chemical or biological agents will automatically be compensable, including new diseases. Currently, only diseases listed in the Second Schedule of the Act (e.g. noise induced deafness) would be compensable and a new deadly flu strain, would not be compensable unless included in the Schedule. Under the new bill, the employee must still prove that he was more likely than not exposed at work, and not as a result of community spread.

3. Liability of Work Related Fights reduced. If the injury is due to a fight between employees at work (Ministry of Manpower receives about 20 such cases a year), this would not be compensable if the worker was an active party to the fight.

Salient points which will impact insurers:

1. In situations where there are multiple policies involved, the employer's Work Injury Compensation insurer cannot deny liability on the basis of the existence of other insurance covering the employee.

2. An exception to this is that third parties will be allowed to pay compensation as long as they convey in writing to the Ministry of Manpower the intent to pay compensation on behalf of the employer's insurer, before the notice of assessment is issued.

3. Work related exclusions are disallowed, except pertaining to asbestos. Insurers are liable to make payment of the compensation even if work-related exclusions exist in their policy. Typical examples of such exclusions are working at height, hot work, etc..However, insurers will continue to be able to seek recovery from the employer if such recovery is allowed in the insurance policy.

Best practice to ensure compliance with the new bill:

1. Ensure that appropriate Work Injury Compensation Insurance Act Insurance is taken up, and declare the full payroll of all employees,  including wages, bonuses, annual wage supplements, food and housing allowances, and overtime (but excluding travelling allowances and CPF contributions) to the insurers.

2. Use a dedicated Work Injury Compensation Insurance policy issued by a Singapore licensed insurance company. Do not use Personal Accident Insurance to cover Work Injury Compensation liability as personal accident policies do not cover occupational diseases. The New Bill's extension to new occupational diseases makes Personal Accident policies, which covers death or permanent major injury (only) due to accident totally inappropriate for covering Work Injury Compensation Liability. 

The full speech on the amendment bill delivered in the Singapore Parliament on 21st November 2011 is available on the Ministry of Manpower's website.

Health Insurance in Singapore: Analysts Suggest Reforms

The local press publishes a video and article citing certain analyst views that private health insurance should be reformed including:

1. Increasing portability of insurance schemes when a worker moves from one company to another;

2. Expanding coverage for those with pre-existing conditions; and 

3. Offering discount on premiums if an insured individual continues to remain healthy after a number of years, for instance.

 

My general view as to medical insurance for Singapore citizens and permanent residents is as follows:

a) purchase maximum coverage available under Integrated Shield Plans and Medishield Plus Plans, as these are regulated to prohibit insurers penalizing insureds for pre-existing illnesses that occur year to year. Medical insurance purchased under Integrated Medishield Plans are typically lower cost as compared to non-medishield linked insurance from the private insurance market. For more information on Medishield, visit the CPF website on Understanding Medishield and Medisave. 

b) negotiate or select employers that provide corporate inpatient and outpatient benefits. Inpatient benefits currently often exclude pre-existing illnesses, and therefore Medishield insurances previously purchased should not be cancelled just because the employee is on a employer sponsored plan. For larger companies or companies that are offering better than average medical benefits, pre-existing illness are sometimes also covered. 

c) private medical insurance to supplement a) and b)  above, should be considered if treatment in private hospitals is considered essential, and if coverage not typically offered by employers' e.g. maternity is also required. This type of private medical insurance can be several times the cost of Medishield linked insurances, however, and the benefits versus this additional cost should be weighed carefully.

If multiple insurance exists to cover an ailment, the order of priority of claim should be:

1. Claim from the employers' medical insurance until this is exhausted.

2. Claim from private medical insurance if this has been taken up

3. Claim from Medishield (there are often lifetime limits on Medishield insurances) and use of Medishield should be avoided and preserved as much as possible.

4. FInally, Medisave (not technically an insurance) is the last resort.

For information on Medishield visit: http://mycpf.cpf.gov.sg/CPF/my-cpf/Healthcare/PvdHC3.htm

Problem Gambling Report

The Ministry of Community Development, Youth and Sports, publishes problem gambling data from a recent survey on participation in gambling actitivities among Singapore Residents. The report indicates that a slightly higher prevalence of probable pathological gambling was found in residence with the following profile:

1. Male

2. Aged 18 to 29 years

3. "O'level /ITE/ VITB education

4. Those with personal income of SGD2,000 to SGD2,999 and SGD4,000 and above

Government Speech at Young Presidents Organisation Summit in Singapore

An interesting speech, given at the recent Young Presidents Organisation YPO summit held in Singapore, highlights the transition of Asia from a place of low cost input to a source of final demand: Ministry of Trade and Finance Newroom Article

HSBC sells Singapore Insurance Operations to Axa

The local press reports on HSBC Insurance Singapore's sale of its general insurance business to Axa. Our enquiries with our contacts at HSBC Insurance indicate there there will be no changes in the products offered, and existing contracts of insurance remain fully in force. According to the Axa press release, the acquisition would not change its current ranking in Singapore (number 2).

 

Car Insurance Premiums stabilize in 2011

The local press reports on findings by the General Insurance Association (GIA) of profitability in motor insurance which resulted in a much lower increase in motor insurance premiums (2.5%) in 2011. This is in comparison to the 20%-40% increase in the last 4 years, according to GIA President Derek Teo.

The General Insurance Association Press release on 2011 insurance industry statistics has more details on the profitability results for the insurance industry for Motor and other classes of insurance.

Inflation moderates to 4.6%

Inflation reduced slightly to 4.6% year on year February 2012 compared to 4.7% year on year January 2012, according to the latest Monetary Authority of Singapore press release. Factors include post Lunar New Year seasonality which resulting in reduction in non cooked food prices (especially seafood), and reduction in car prices. On the other hand, accomodation costs rose 10% year on year and remains the largest contributer of CPI-All Items inflation.

The local press published an article on this as well.

Weekly Rest Day Requirement for Foreign Domestic Workers

A weekly rest day will be mandated for Foreign Domestic Workers employed and renewd from 1st January 2013. 

New VISA for Application for Foreign Spouses

The Long Term Visit Pass Plus is offered to provide more flexibility for spouse of foreign nationals in Singapore (that have not successfully obtained permanent residency) to stay and seek work. 

The Immigration and Checkpoints Authority will accept applications for this new pass from 1st April 2012.

Sources: Straits Times New Article

Immigrations and Checkpoints Authority FAQ on LTVP+

EIU ranks Singapore 3rd Most Competitive Global City

In its The Economist Intelligence Unit ranked Singapore as the the 3rd Most Competitive Global City, after New York (1st) and London (2nd).

The report defines "Competitiveness" as "the demonstrated ability to attract capital, business, talent and visitors." The findings included 120 cities, assessed on the basis of 21 qualitative and 10 quantitative indicators. Singapore is particularly well in 

a) physical capital (ranked joint first overall),

b) financial maturity (joint first),

c) institutional effectiveness (6th) and

d) global appeal (4th).

Sources: 

Economic Development Board of Singapore Press Release

Economist Intelligence Unit "Hot Spots: Benchmarking global city Competitiveness" Report

 

 

Ministry of Manpower Statistics Show Unemployment in 2011 as the Lowest in 14 years