CENTRAL PROVIDENT FUND (AMENDMENT) BILL (As Reported from Select Committee)

Order for Third Reading read. 4.35 p.m.

Mr Deputy Speaker: The Minister for Communications and Minister for Labour has given notice that he wishes to propose an amendment to clause 2 of the Bill. The Bill accordingly stands recommitted to a Committee of the whole Parliament in respect of clause 2.

Does any Member wish to propose any other amendment or new clause or schedule?

Hon. Members indicated none.

Mr Deputy Speaker: Committee stage, what day, Mr Minister?

The Minister for Communications and Minister for Labour (Mr Ong Teng Cheong): Now, Sir.

Bill considered in Committee.

[Mr Deputy Speaker in the Chair]

Clause 2 -

Mr Ong Teng Cheong: Mr Deputy Speaker, Sir, I beg to move,

In page 3, line 6, to leave out from "to" to the end of line 9 and insert -

(a) such a member if he is fifty-five years of age or above at the date when payment of the premium is due to be paid under section 13G of this Act; or

(b) such members or class of members whom the Minister may, by notification in the Gazette, specify.".

The Home Protection Insurance Scheme is available to CPF members who own homes developed by the Housing Authority specified in the Bill. Circumstances may warrant the exclusion of certain members or classes of members from the scheme. The proposed amendment is, therefore, to enable such exclusions.

Amendment agreed to.

Clause 2 as amended, ordered to stand part of the Bill.

Bill reported with an amendment.

Third Reading

Mr Deputy Speaker: Third Reading, what day?

Mr Ong Teng Cheong: Now, Sir, I beg to move, "That the Bill be now read a Third time."

The Central Provident Fund (Amendment) Bill was committed to a Select Committee by the House on 6th March 1981. The Committee received three written representations, one from an individual, the second from the Great Eastern Life Assurance Field Officers Guild and the third from the Life Insurance Association. The Committee heard oral evidence from three representatives of the Life Insurance Association.

I would like now to touch briefly on the major concerns of the Life Insurance Association and the Committee's consideration of their representations. The Life Insurance Association welcomed the idea of a mortgage reducing insurance scheme for CPF members. It was, however, opposed to the proposal that the CPF Board run the scheme because it considered the insurance industry well placed and well equipped to handle the scheme on a consortium basis. It was also concerned that the CPF Board would later on move into other fields of insurance.

It was pointed out to the Life Insurance Association that the mortgage reducing insurance scheme was part of the State's social security provision and a logical extension of the Home Ownership Scheme. The CPF Board being a non-profit oriented organization and able to offer the most attractive premiums should be the body to run the scheme. There was no reason why legislation should be enacted to require CPF members to take out a mortgage reducing insurance policy from a profit-making organization like the consortium proposed by the Life Insurance Association.

The Life Insurance Association submitted a proposal for the mortgage reducing insurance scheme. It suggested that it be underwritten by a consortium to be formed by members of the Association. The Committee noted that the premium rates quoted in the Life Insurance Association proposal were higher than those proposed by the CPF Board. Furthermore, under the Life Insurance Association's proposal existing borrowers may be required to undergo a medical examination at their (insured) own expense and be subject to higher premiums if found unfit. In the case of the CPF scheme, there was no requirement for a medical examination. In addition, the premium rates under the Life Insurance Association's proposal were only valid for two years after which the rates may be revised in the light of experience. There was no such limitation in the case of the CPF scheme.

Mr Deputy Speaker, Sir, the Select Committee gave due consideration to the representations made, but did not make any amendments to the CPF (Amendment) Bill.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Third time and passed.