Missed a premium payment? – Here is what you and your client should know

In the wake of the pandemic lockdown, many short-term policyholders find themselves in a financial predicament and unable to pay their insurance premiums. The latest Short-term Ombudsman (OSTI) Briefcase discusses various options available to assist policyholders, and help you retain business.

“To prepare for the discussion with the insurer, the policyholder should first check the policy to familiarise him/herself with the policy requirements and provisions relating to the payment of the premium and missed premiums,” OSTI advises. “The policyholder should also familiarise him/herself with the provisions contained in the Policyholder Protection Rules.

According to Rules 11.6.6. and 11.6.7 of the Policyholder Protection Rules, which came into effect on 1 January 2019, the insurer is required to give the policyholder written notice that it did not receive the premium within 15 days of the insurer becoming aware of the non-payment of the premium.
Rule 15.1 of the Policyholder Protection Rules states that policies must contain a provision for a period of grace within which to make payment of a premium after the due date. This period of grace must not be less than 15 days and only applies from the second month of the policy.

Click here to access a few examples of the different provisions in policies relating to the payment of premiums, the grace period and the lapsing of policies due to unpaid premiums.

This is also a useful tool to share with clients in terms of disclosure obligations, especially those suffering from selective amnesia.

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