1 September 2009
The Monetary Authority of Singapore (MAS) is introducing and implementing a new framework for Nomination of Beneficiaries in respect of insurance policy proceeds on 1 September 2009. This new framework is illustrated within the new Insurance (Nomination of Beneficiaries) Regulations 2009.
What are the key features of the new Regulations?
Policy owners will have a choice of whether or not to make nominations. If they choose to nominate, they will then have two options
- Revocable nomination
With a revocable nomination, the policy owner will be able to unilaterally change his nomination at any time. The policy proceeds under such a nomination will be paid to the policy owner while he is still alive, or to his beneficiaries after death; OR
- Irrevocable (trust) nomination
An irrevocable nomination will create a statutory trust in favour of the beneficiaries. The policy owner will lose all rights and control over the policy concerned. The policy proceeds will thus be protected from his creditors. Only the policy owner's spouse and/or children can be nominated as the beneficiaries in an irrevocable nomination. All policy proceeds under such a nomination will be paid to the beneficiaries. Only policyowners who are at least 18 years old may make a trust nomination.
Only life policies with death benefits will be eligible for nomination.
Policies with existing nominations will continue to be subject to the legislation in-force at the time the nomination was made. It will not apply retrospectively.
Why is this change taking place?
This change will give policy owners guidance on how the proceeds from their insurance policies should be distributed.
If you need further assistance with regards to the above, please do not hesitate to contact your dedicated Relationship Manager or refer to the MAS website www.mas.gov.sg
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