Who Is Doctor Ruth Gottesman

A historic, billion-dollar donation to a medical school in New York City has provided students with free tuition moving forward. Albert Einstein College of Medicine in the Bronx received a $1 billion donation from Dr. Ruth Gottesman, former professor and chair of the school's board of trustees.

The massive donation -- a "transformational gift," is among the largest ever made to a university in the United States and seemingly the largest made to an American medical school, according to the institution. The $1 billion donation will ensure that no student at Einstein will have to pay tuition again.

Free Tuition - All current, fourth-year students will be reimbursed their spring 2024 semester tuition and, beginning at the start of the next term, all students moving forward will receive free tuition at Albert Einstein College of Medicine.

Tuition and fees for one year at the medical school total over $63,000, and more than half the medical students owe upward of $200,000 in student debt after graduating. Almost half of students are New Yorkers and nearly 60% of students at the university are women

David Sandy Gottesman - The donation comes from Gottesman and her late husband, David "Sandy" Gottesman, who was the founder of First Manhattan Co. and an early investor in Warren Buffett's Berkshire Hathaway, before he died in 2022 at 96 years old.

RSA Insurance Claim - Exposed

A court in Ireland dismissed a mother’s $820,000 insurance claim after a picture emerged of her winning a contest to see who could toss a tree the farthest. Kamila Grabska, 36, had claimed that a car accident in 2017 left her with “debilitating pain,” leaving her unable to lift heavy bags and keeping her in bed on bad days, according to disclosures made at Ireland's High Court.

The constant pain in her back, neck and thoracic spine left her unable to lift groceries, do chores or play with her two children. She sued RSA Insurance on the basis that she could not work for over five years, claiming past and future loss of earnings that amounted to around $542,000 of her total claim.

Claim Scam Exposed - Her case came unstuck when a photo published in the newspaper almost a year after her accident showed Grabska winning a Christmas tree throwing contest.

The picture, taken in January 2018, shows Grabska, wearing a yellow jacket, forcefully throwing the tree in the town of Ennis in western Ireland, where the championship, based on an old lumberjack competition, takes place. The winner is the person who throws it the farthest.

A second picture published the day shows her smiling as she holds a mounted certificate declaring her the champion.

Court Examinations - When she was cross-examined in court, Grabska said she still felt pain when she threw the Christmas tree and was smiling in photos because she was trying to “live a normal life. But Judge Carmel Stewart, who presided over the case, said she had no choice but to dismiss the claim because of the “very graphic picture” of Grabska’s throwing the Christmas tree, which was “at odds” with the medical evidence provided. “I’m afraid I cannot but conclude the claims were entirely exaggerated,” she said.

She also took into consideration video from last November, played to the court, showing Grabska play-wrestling with a big Dalmatian dog for up to 1.5 hours. An entry on the Courts Service of Ireland says Grabska’s case was dismissed last week. It did not include any further details.

RSA Insurance and Grabska’s legal representatives did not immediately respond to requests for statements.

20% Malaysia Medical Premium Hike

Health insurance policyholders in the country seem to be the hardest hit when it comes to price hikes. For the second time in three years, health insurers have seen it fit to increase their premiums by a hefty 20% or more.

2021 Premium Hike - This comes after a similar re-pricing exercise in 2021 which saw 20%-30% increases during the height of the COVID-19 pandemic and economic downturn.
Industry offers multiple reasons, including medical inflation and the post-pandemic elective surgery uptake. While insurers were very active in trying to contain costs, providers were not actively controlling costs for insured patients. Policy plan designs which are changing also do not encourage patients to be conscious of costs as most plans today pay nearly 100% of the hospital bill.

Who’s at fault - Private hospitals had implemented strategies to manage the effects of escalating premiums. While cost-effective practices such as using generic medications and efficient technologies were embraced, balancing affordability and sustainability was challenging. This is a continuing tug-of-war between insurers seeking cost-effective solutions and healthcare providers advocating for patient choice and maintaining quality care standards.

Federation of Malaysian Consumers Associations (FOMCA) challenges the narrative of insurers attributing the premium hikes to medical inflation and rising private hospital charges.
FOMCA identified the lack of price controls on medicines and medical devices. While doctors’ fees are regulated, they are often bundled with treatment, medicines and hospital charges. There is often a lack of transparency in disclosure and worse still, the prices charged are exorbitant.

He described the considerable rise in insurance premiums as “unjustified”. The overloaded public healthcare system often pushes consumers towards private healthcare where prices are unregulated, resulting in exorbitant bills.

Justifying premium re-pricing - LIAM explained that on-going medical claims witnessed a considerable surge with a notable 28% increase in 3Q 2023 compared to the same period in 2022. This follows a substantial 34% hike in 2022.

The medical insurance policy becomes unsustainable when the premiums collected are insufficient to cover the expected claims expenses. BNM declined to respond if it had approved this latest premium re-pricing. This leaves a critical regulatory perspective unaddressed in the on-going dialogue on the sustainability of health insurance protection in Malaysia.

According to BNM’s 2019 Annual Report, the re-pricing of medical and health insurance (MHI) products is a significant concern affecting 4.5 million policies between 2016 and 2019. The consequence of this re-pricing is an affordability crisis as more expensive premiums render coverage increasingly unaffordable for a significant portion of the population.

This phenomenon is exacerbated by what the Report terms the “buffet syndrome” wherein policyholders seek to maximize the value of their premiums without considering associated costs, contributing to the upward spiral of healthcare expenses.

Sunlife Engaging Generation Z

Sun Life Philippines (Sun Life) has rolled out a new campaign response to the evolving job landscape, driven by the gig economy’s allure for younger workers seeking independence and flexible work arrangements.

The insurer’s “The Next Big Gig” campaign aims to engage millennials and Generation Z, who are progressively gravitating towards freelance and part-time roles, by introducing the concept of becoming a financial advisor as an appealing side gig.

The campaign kicked off with a media event at the Makati where Sun Life financial advisors shared insights into the benefits of their roles, including potential earnings, flexible working hours, and the satisfaction of assisting clients on their financial security path.

Highlighting the campaign’s launch was the debut of a new digital video by Sun Life, portraying financial advisors from varied professions – including teaching, online retail, corporate sectors, and entrepreneurship. The individuals testified to the advantages of their dual roles, emphasising financial gains, travel perks, advocacy opportunities, and the rewarding experience of guiding clients as a “Partner for Life”.

The event also featured interactive booths, or “pods”, each designed to offer a glimpse into the life of a financial advisor. These included a quiz on life insurance knowledge, a photo booth with an international travel theme representing advisors’ travel benefits, and a display of the advisors’ social responsibility initiatives, complete with an interactive voting system for future projects.

Vietnam Life Insurance 12% Growth 2022

Vietnam remains a key life insurance market in Asia with nearly 14 million life insurance contracts as of the end of 2022. The number of life insurance contracts in the country in 2022 increased by 5 per cent year on year and premiums rose by 12 per cent to over 178 trillion Vietnamese dong (US$7.6 billion).

Bancassurance - Of the contracts, 995,000 were through bancassurance, which accounted for 46 per cent of the premiums. Life insurance claims last year topped 44 trillion Vietnamese dongs ($1.9 billion), a 34 per cent increase. The life insurance market in Vietnam has 730,000 agents.

Recently, insurance companies in Vietnam have been required to tighten the supervision of agencies and sales amid negative feedback from the public over poor transparency of insurance products.

The country's Insurance Supervisory Authority demanded insurance agencies immediately take measures to provide clients with complete and accurate information and review the quality of their agents' consultation and sales techniques.

Indexed Universal Life

Indexed Universal Life (IUL) insurance policies can help you to build wealth while leaving behind a death benefit for your loved ones. These policies put a portion of the policyholder’s premium payments toward annual renewable term life insurance with the remainder added to the cash value of the policy after fees are deducted. On a monthly or annual basis, the cash value is credited with interest based on increases in an equity index. 

Understanding Indexed Universal Life Insurance - IUL insurance is often pitched as a cash value insurance policy, that benefits from the market’s gains tax-free—without the risk of loss during a market downturn.

When you purchase an IUL insurance policy, you’re getting permanent coverage as long as premiums are paid. Your policy includes a death benefit, which is paid out to your named beneficiary or beneficiaries when you pass away. But the policy can also increase in value during your lifetime through a cash value component.

The cash value portion of your policy earns interest based on the performance of an underlying stock market index. For example, returns may be linked to Standard & Poor’s (S&P) 500 composite price index, which tracks the movements of the 500 largest U.S. companies by market capitalization. As the index moves up or down, so does the rate of return on the cash value component of your policy.

The insurance company that issues the policy may offer a minimum guaranteed rate of return. There may also be an upper limit or rate cap on returns.3

IUL insurance is riskier than fixed universal life insurance policies, which offer a guaranteed minimum return. But it’s less risky than variable universal life insurance, which allows you to invest money directly in mutual funds or other securities.

Benefits of Indexed Universal Life Insurance 

1. Higher Return Potential - These policies leverage call options to gain upside exposure to equity indexes without the risk of losses, while whole life insurance policies and fixed universal life insurance policies provide only a small interest rate that may not even be guaranteed. Of course, the annual return that you see with an IUL insurance policy will depend on how well its underlying index performs. But your insurance company can still offer a guaranteed minimum return on your investment.

2. Greater Flexibility - IUL insurance can offer flexibility when putting together a policy that’s designed to meet your investment goals. Policyholders can decide how much risk they would like to take in the market, adjust death benefit amounts as needed, and choose among a number of riders that make the policy customizable to their needs. For example, you may choose to add on a long-term care rider to cover nursing home costs if that becomes necessary or an accelerated death benefit rider, which can pay out benefits if you become terminally ill.

3. Tax-Free Capital Gains - Capital gains tax applies when you sell an asset or investment for a profit. Indexed universal life insurance policyholders do not pay capital gains on the increase in cash value over time unless they abandon the policy before it matures, whereas other types of financial accounts may tax capital gains upon withdrawal.

This benefit extends to any loans that you may take from the policy against your cash value. Having a ready source of cash that you can borrow against may be appealing if you want to avoid triggering taxes and penalties with an early withdrawal from a 401(k) or IRA.5

Unlike a 401(k) or traditional IRA, there are no required minimum distributions for cash value accumulation in an indexed universal life insurance policy.6

4. No Social Security Impact - Social Security Benefits may be an important source of income in retirement. You can begin taking Social Security as early as age 62 or defer benefits up to age 70. Taking benefits ahead of your full retirement age can shrink your benefit amount, as can working while receiving benefits. You’re only allowed to earn so much per year prior to reaching full retirement age before your benefits are reduced.78

As with any permanent life insurance policy, cash value accumulation from an IUL insurance policy wouldn’t count toward the earnings thresholds, nor would any loan amounts that you borrow. So you could take a loan against your policy to supplement Social Security benefits without detracting from your benefit amount.8

5. Death Benefit - IUL insurance, like other types of life insurance, can provide a death benefit for your loved ones. This money can be used to pay funeral and burial expenses, cover outstanding debts such as a mortgage or co-signed student loans, fund college costs for children, or simply pay for everyday living expenses. This death benefit can be passed on to your beneficiaries tax-free.9

Financial experts often advise having life insurance coverage that’s equivalent to 10 to 15 times your annual income.

Drawbacks of Indexed Universal Life Insurance - There are several drawbacks associated with IUL insurance policies that critics are quick to point out. For instance, someone who establishes the policy over a time when the market is performing poorly could end up with high premium payments that don’t contribute at all to the cash value. The policy could then potentially lapse if the premium payments aren’t made on time later in life, which could negate the point of life insurance altogether.

Aside from that, keep in mind the following other considerations:

1. Possible Limits on Returns - Insurance companies can set participation rates for how much of the index return you receive each year. For example, let's say the policy has a 70% participation rate. If the index grows by 10%, your cash value return would be only 7% (10% x 70%). While some policies give you 100% of the index return and even more, others set maximum participation rates below 100%.

In addition, returns on equity indexes are often capped at a maximum amount. A policy might say your maximum return is 10% per year, no matter how well the index performs. These restrictions can limit the actual rate of return that’s credited toward your account each year, regardless of how well the policy’s underlying index performs.

In that case, you may be better off investing in the market directly or considering a variable universal life insurance policy instead. But it’s important to consider your personal risk tolerance and investment goals to ensure that either one aligns with your overall strategy.

2. Unpredictable Returns - Whole life insurance policies often include a guaranteed interest rate with predictable premium amounts throughout the life of the policy. IUL policies, on the other hand, offer returns based on an index and have variable premiums over time. This means that you have to be comfortable riding out fluctuations in returns while also budgeting for potentially higher premiums.1

3. Fees - IUL insurance policies can come with a slew of fees and other costs, including:
- Premium expense charges
- Administrative expenses
- Riders
- Fees and commissions
- Surrender charge

S&P Dow Jones Indices. "S&P 500."

Singapore Life Insurance 2023 Updated

The Life Insurance Association of Singapore (LIA Singapore) has released its industry results for the full year ending December 2023 (FY23), showcasing a notable 14.4% increase in weighted new business premiums for the fourth quarter (Q4) of 2023 compared to the same period in the previous year.

The year-to-date figures for Q4 2023 revealed a total of S$4.9 billion in weighted new business premiums, marking a 4% rise in non-par funds to S$1.84 billion from S$1.77 billion in 2022. Despite a 3.9% decrease in total weighted new business premiums for 2023 compared to the previous year, attributed mainly to a decline in single premium business, there was a surge in demand for regular premium non-par products, including term and health insurance plans.

Industry Resilience - The Singapore life insurance sector has persevered through a challenging macroeconomic environment, contributing to narrowing the nation's protection gap. This is evidenced by a 1.9% year-on-year increase in total sum assured for the period, with significant contributions from financial adviser (FA) representatives and tied representatives.

Additionally, the sector saw a 1.9% increase in the number of lives covered by health insurance, with around 60,000 more Singaporeans and permanent residents insured by integrated shield plans (IPs) by the end of 2023, covering approximately 70% of Singapore residents.

Other Key Figures - The final quarter of 2023 witnessed a significant uptake in both annual and single premium products. Annual premium products saw a 15.5% increase in total weighted new business premiums for Q4 2023 compared to the same period in 2022, while single premium products experienced a 12.2% increase in weighted premiums for the fourth quarter. This growth reflects the industry's response to evolving consumer needs amidst rising interest rates and a volatile economic landscape.

Demand for IPs remained robust, with total weighted new business premiums for individual health insurance reaching S$441.1 million for the period, a 14.9% increase from the previous year. IPs and IP rider premiums dominated, accounting for 85% of this figure.

The industry also reported a 16.2% increase in claims payouts in 2023, totalling S$13.58 billion to policyholders and beneficiaries. This included payouts for matured policies, death, total and permanent disability, and critical illness claims.

Other key highlights for the period included the distribution of product classifications, with par products accounting for 30% of total weighted new business premiums, non-par products 37%, and investment-linked products the remaining 33%.

Insurers with “normal” licenses contributed 98% of the total weighted new business premiums, while “defined market segments” (DMS) insurers made up the rest. Employment in the life insurance industry grew by 3.5%, indicating ongoing digital transformation initiatives.

Moving Forward - Cost of living is a key concern amongst many in Singapore, and the life insurance industry is committed to finding ways to support members of the community [to] address their protection and financial needs. 

Sosco RM5.7 Billion Payout

The Social Security Organisation (Socso) made benefit payments of up to RM5.7bil to Insured Persons and their dependents last year. Socso's excellent fiscal flow has helped further increase the sustainability of funds and the ability to pay interest. 

The financial performance ended last year also recorded a surplus of RM1.8bil thus recording the best performance since Socso was established in 1971. The estimated surplus reached RM1.8bil, which shows an increase of 50%, or even 1.5 times compared to the previous year.

Socso success was driven by contribution income and enforcement, which saw a positive growth of 14% as well as an increase in gross investment income to 27% with a Return On Investment (ROI) exceeding 6%.

Among them is the enforcement of an increase in the insured salary ceiling and the amendment of the Employment Act 1955 related to the coverage of overtime pay. Socso is also encouraged to explore new forms of protection such as protection outside of work, as well as strengthen the quality of governance and services holistically in ensuring more sustainable and universal protection.

New and improved Prihatin application will allow users to check and download contribution statements, Self Employed Social Security Scheme (SKSPS) registration, benefit calculation, obtain general information and access Sahabat Prihatin.

Life Insurance & Takaful Eligible EPF Account 2

Employees' Provident Fund (EPF) contributors can now use funds from Account 2 to buy insurance for themselves and immediate family members. This includes life insurance, critical illness insurance and takaful products under i-Lindung Phase 2.

Members may purchase insurance from EPF-approved companies and takaful operators via the platform within the EPF i-Akaun (member) mobile application. 

Since its launch in July 2022 until December last year, more than 102,301 members have purchased a total of 118,166 policies and takaful products through the i-Lindung platform at affordable premiums. In view of this encouraging response, EPF had introduced key upgrades focusing on policy and certificate management geared towards extended coverage exceeding one year.

The platform offers features for streamlined policy management and recurring payments for long-term protection," it added.

Bribes At Singapore Insurance Industry

A former chief executive officer of insurance firm AON Singapore, Collin Chiew, was charged (February 8th, 2024) with obtaining S$668,000 in bribes while he headed AON, and later as a director at another insurance firm.

The bribes were allegedly paid by three individuals linked to Fullerton Healthcare Group (FHG), a company which operates several clinics in Singapore. The three were charged on Thursday with giving bribes to Chiew and falsifying accounts (said Corrupt Practices Investigation Bureau - CPIB).

On Thursday, Chiew, 56, was also handed a money laundering charge for allegedly using criminal proceeds to buy a landed property. This is the second time Chiew has been charged in court over corruption. In December, he was accused of obtaining S$240,000 in bribes on two occasions between Dec 2017 and May 2018 from FHG through Straits Priority Consulting.

On Thursday, Chiew was charged with three additional counts of corruptly obtaining gratification, in relation to S$384,000 of bribes that he allegedly obtained as CEO of AON Singapore from 2015 to 2018. Chiew is accused of receiving the monies over multiple occasions from Chan Pai Sheng, Daniel, who was former director of FHG, as inducements to advance the business interest of the healthcare company with AON Singapore.

In relation to this, Chan, a 50-year-old Singaporean, who is also former director of Fullerton Health and former president of Fullerton Health China, was charged with four counts of conspiring with two others to corruptly give bribes to Chew. 

The two individuals are Singaporeans Tan Kim Song Michael, 50, and David Sin, 44.Tan is a former director of FHG while Sin is a former president and former board chairman of Fullerton Healthcare Corporation.

AIA Hong Kong - Chiew also faces one count of obtaining bribes in 2019 as director of AIA Hong Kong. He allegedly obtained S$320,000 in gratification from Chan over four occasions, as inducements to advance the business interests of FHG with AIA Hong Kong.

Chan and Sin each face one count of conspiring to corruptly give gratifications to Chiew over this alleged offence. Chan was also charged with eight counts of falsifying accounts. He allegedly falsified entertainment claims from 2016 to 2019 to defraud Fullerton Healthcare Corporation and Fullerton Health China into paying him about S$440,666, when the actual entertainment expenses incurred was about S$169,719. He had allegedly used the amounts claimed to pay bribes to Chiew.

Tan and Sin also respectively face one count and eight counts of allegedly conspiring with Chan to falsify accounts. A corruption offence attracts a penalty of five years’ jail, a fine of up to S$100,000, or both.

If convicted of a money laundering offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, a person can be imprisoned for up to 10 years, fined up to S$500,000, or both.

Challenges in Bancassurance

Bancassurance accounts for an average of 36% of Life and Health (L&H) insurance premiums across six Southeast Asian markets – Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

The SRI also surveyed Singapore, Thailand, and Vietnam markets, where 67% of consumers showed strong preference for insurance agents over banks, particularly for medical and hospitalization insurance.

Challenges - New challenges for bancassurance includes the decline in in-person visits to bank branches (accelerated during the pandemic), coupled with the rise of digital apps providing services like embedded insurance and increasing bank interest rates.

More than a third of consumers also expressed their main concerns regarding banks as sales representatives having weaker product knowledge and occasionally recommending products not suiting the customers’ needs.

At the same time, while 89% of the bank sales staff surveyed are confident in their insurance product knowledge, many find underwriting as well as the complex and technical nature of the onboarding processes most challenging when it comes to selling insurance.

Despite these challenges, 81% of consumers who purchased insurance from a bank expressed satisfaction in service quality. Additionally, 52% of consumers preferred buying savings products from banks over agents, likely due to the similarity between insurers’ and banks’ offerings.

Preferences & Training - Consumers are still buying more savings-type insurance products through bancassurance than protection products, which indicates an area for remediation.

To enhance bancassurance’s role in the region’s L&H growth, insurers need to improve bank sales staff training, simplify underwriting, use alternative data for underwriting, offer tailored products, and utilize digital channels.

MAS - Propose Reduce Information - Life Insurance Application

The Monetary Authority of Singapore (MAS) wants to make it easier for consumers to buy simple and cost-effective insurance policies that meet their needs, thus narrowing protection gaps here. To achieve this, MAS is proposing cutting down on the amount of information consumers have to give to financial institutions selling these policies.

Basic Financial Planning Guide - Representatives from financial institutions will be allowed to collect less information from clients when they make recommendations on these policies that are based on the Basic Financial Planning Guide. 

The proposals apply to term life insurance policies, standard critical illness riders sold with term life insurance, and standard standalone critical illness policies.

The guide outlines a few rules of thumb for individuals to address their savings, insurance and investment needs. For example, consumers are advised to spend at most 15 per cent of their take-home pay on insurance protection.

They are also encouraged to obtain insurance coverage of nine times their annual income for death and total permanent disability (TPD), and four times their annual income for critical illness.

Protection Gap - A Life Insurance Association Singapore (LIA) study released in September 2023 showed a 21 per cent mortality protection gap and 74 per cent critical illness protection gap in 2022.

Term insurance policies are generally more cost-effective for obtaining protection compared with bundled insurance products such as whole life insurance policies and investment-linked policies.

Meanwhile, a standard critical illness policy provides coverage against LIA’s list of 37 medical conditions. Non-standard critical illness policies are excluded from the exemption to collect reduced information as they may have additional and bespoke coverage features, and may cost more.

If the proposals are adopted, financial institutions will need to ask clients only for their financial objectives; their current insurance policies that provide coverage for death and TPD, critical illness, or both; and their annual income.

For standalone critical illness policies and critical illness riders, clients must also disclose any medical conditions they may have.

Clients currently need to disclose other information such as their financial situation – including assets, liabilities, cash flow and income – their financial commitments, and information about their dependents where applicable.

Terms & Conditions - When relying on the exemption to collect reduced information, financial institutions will be required as a safeguard to explain all the rules of thumb in the Basic Financial Planning Guide to the client.

They must also guide the client in budget allocation to meet key financial needs, such as setting aside sufficient emergency savings, and confine their recommendations to the applicable policies.

Financial institutions also need to verify that the client’s total death and TPD coverage does not exceed nine times his annual income, after taking into consideration existing insurance policies and the recommended policy.

The client’s critical illness coverage must not exceed four times his annual income after factoring in these policies.

As another safeguard, financial institutions must also verify that the client’s total annual outlay on insurance policies that provide death, TPD and critical illness coverage does not exceed 15 per cent of take-home pay.

The regulator added that clients may have existing policies that provide coverage for death, TPD or critical illness which include bundled insurance or non-standard critical illness policies.

Clients may not be able to achieve insurance protection based on the rules of thumb in the guide. The recommendation of a policy by the FA (financial adviser) representative may cause the client to exceed 15 per cent of their take-home pay, or place the client in a position where the gap on death or TPD coverage is addressed but not the gap on critical illness coverage, or vice versa.

In such a situation, more care should be accorded by FAs and their representatives, when advising clients on ways to address the insurance protection gap, such as allocation of budget across the different financial needs, options available and risks of switching products,” said MAS, adding that there might be less merit to reduce the information collected from clients in such circumstances.

Regulations - Once the proposals take effect, it will be an offence under MAS’ regulations if financial institutions do not comply with the new rules and safeguards. Non-compliance could attract regulatory actions, including a penalty of up to $100,000.

Where there is misconduct by financial institutions or their representatives, MAS will investigate and take firm enforcement actions against errant financial institutions and representatives.

For representatives, this could include prohibition orders to bar those who have committed serious offences from performing regulated activities in the financial industry for a specified period.