Premium Payment Framework

On 18 March 2005, the General Insurance Association of Singapore (GIA) and the Singapore Insurance Brokers Association (SIBA) have announced the Premium Payment Framework for the collection of insurance premiums as an insurance industry benchmark, which takes effect from 1 May 2005.

This Framework aims to improve efficiency in the collection of premiums for general insurance policies and minimises the possibility of claim disputes between insurers and customers.

Key applications of this Warranty:

Full premium payment must be made before policy inception at the time of documentation

Payment by a policyholder to an agent or a broker is deemed payment to the insurer

The Warranty is complied with once payment is made to the insurer or agent or broker before policy inception

Key applications of this Warranty:

For Periods of Insurance of more than 60 days
• Cover terminates on the 61st day if premium is not paid within 60 days of inception date of the policy.
• Insurer is entitled to a pro-rata premium payment for the 60-day cover (subject to minimum S$25).

Supplementary Procedures
Listed below are supplementary procedures to support Premium Payment Warranty:
• Provisional Billing
Policy data is required to be presented to the insurer by the 21st day of policy inception. This will enable Insurers to produce the policy by the 30th day.

If policy data is nor received by said 21st day, a provisional policy and tax invoice will be issued based on:
- Expiring terms for renewals, or
- Quoted terms for new policy

• Termination
Non payment of premium within 60 days of policy inception results in automatic termination of the policy.

• Remarketing after Cancellation
- Intermediaries / insurers are to insert a condition in quotation slips and insurance policies that policies applied have not been in whole or part terminated by another insurer for non-payment of premium in the last 12 months. If there is a breach of this condition, then cover will be void from inception of the policy.

- If such prior cancellation of policies due to non payment of premium was declared, time on risk premium based on the insurer's customary short period rate must be paid to the previous insurer before cover incepts with the new insurer

• Suspension of Cover
If the premium is paid after the premium payment warranty period, the cover may be reinstated as a new policy from the date of receipt of full premium payment to the original expiry date.

For Periods of Insurance of up to 60 days
• Premium is due within that period.

You may access the press release and the Framework which are posted on the GIA website for your convenient reference:
• Press Release
• Premium Payment Framework