CENTRAL PROVIDENT FUND DEPENDANTS' PROTECTION SCHEME

CENTRAL PROVIDENT FUND DEPENDANTS' PROTECTION SCHEME

10.

Mr Steve Chia Kiah Hong asked the Acting Minister for Manpower (a) what will happen to the net assets of the CPF Dependants' Protection Scheme when the scheme is privatised; and (b) will the privatised insurer, in order to maximise profits, be allowed to (i) raise premiums; (ii) lower payouts; and/or (iii) examine claims more aggressively for pre-existing conditions to avoid payouts.

Dr Ng Eng Hen: When the CPF Dependants' Protection Scheme (DPS) is privatised, the CPF Board will transfer the DPS funds to the private insurers so that they can take over the liabilities of

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existing members covered by DPS and the bonus sum assured given to members in 2003. The CPF Board will retain only whatever it requires to pay off outstanding DPS claims.

The CPF Board will ensure that the existing premium rates will be maintained after privatisation. The terms of coverage and payouts will be at least equivalent, if not better than currently after privatisation of DPS. The main features of DPS will also remain. The Board will select private insurers based on their track record as insurers, financial strength, proven operational efficiency and ability to provide good customer service.

The CPF Board will continue to oversee the DPS policies and ensure that members' interests are protected after the privatisation.

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