BOGUS INSURANCE COMPANIES

Mr Ong Chang Sam asked the Minister for Finance what action has been taken against bogus insurance companies since the coming into operation of the Life Assurance Companies (Compulsory Liquidation) Ordinance, 1962; and whether any policy holder has been refunded his money, and what percentage of the original amount.

Mr Ramaswamy (for the Minister for Finance): Mr Speaker, Sir, I have been asked to reply.

The Life Assurance Companies (Compulsory Liquidation) Ordinance, 1962, came into operation on 3rd April, 1962. Positive steps were then taken to wind up and liquidate the unsound life insurance companies in Singapore. There were, at that time, two groups of such companies. Firstly, Federation incorporated companies with branches in Singapore; and secondly, companies registered and incorporated in Singapore. The first group of insurance companies are being liquidated by order of the Federation High Court.

The process of liquidating a company is a lengthy one, often complicated with legal technicalities. Because of this and because of the tens of thousands of claims that were reviewed, the liquidators in the Federation have not been able to complete their work in respect of any one company. There is information, however, that while a few companies may have some assets that could be realised and distributed, many were in poor financial position and it would be optimistic of any policy holder to expect any more than a fraction of his claims to be honoured.

Action has been taken in Singapore to wind up the unsound insurance companies registered here. The liquidators appointed have been working to realise the assets of the insurance companies and of the three Singapore companies. Policy holders will be informed in the next month or two regarding their claims and the refunds they will receive.

Mr Ong Chang Sam: (In Mandarin): Mr Speaker, Sir, can the Parliamentary Secretary assure this House that after one or two months some of the policy holders can get a refund of their premiums?

Mr Ramaswamy: Mr Speaker, I have already said that the policy holders will be informed in the next month or two regarding their claims and the refunds they will receive.

Mr Ong Chang Sam: (In Mandarin): Mr Speaker, according to the reply of the Parliamentary Secretary, it means that the Government cannot assure this House that in the coming two or three months the policy holders cannot realise their claims.

The Minister for Finance (Dr Goh Keng Swee) rose -

Mr Speaker: The Parliamentary Secretary is answering questions.

Mr Ramaswamy: Mr Speaker, Sir, it all depends on what assets the Companies have. If there are any assets, the policy holders will receive whatever can be distributed.