Singapore’s financial regulator has drawn a clear line on how different health insurance products handle medical advances, telling parliament that updating existing critical illness policies without corresponding premium adjustments would threaten product sustainability. The Monetary Authority of Singapore (MAS) responded May 7 to a written parliamentary question from Gerald Giam Yean Song (Aljunied GRC), who questioned whether insurers could be prevented from rejecting claims on the basis that a newer surgical procedure was absent from legacy policy wording, and whether MAS would move to update medical insurance contract definitions. Deputy Prime Minister and MAS Chairman Gan Kim Yong delivered the response.
Gan pointed to premium sustainability as the primary reason insurers are not required to migrate existing policyholders to updated critical illness definitions. “Existing policies do not assume the updated LIA definitions, as the updated severe stage CI definitions and any associated newer procedures and treatments could widen the scope of policy coverage and increase the incidence of claims. Doing so without a corresponding premium adjustment could impact the sustainability of the product,” Gan said.
Gan clarified that the concern about legacy definitions applies specifically to critical illness products, and that MediShield Life and Integrated Shield Plans operate under a different structure. Coverage under those products follows the Ministry of Health’s Table of Surgical Procedures (TOSP), which classifies procedures according to their clinical intent and outcome rather than the technique or technology used to perform them. Under this structure, a minimally invasive procedure and its open-surgery counterpart can fall under the same TOSP code, provided the clinical goal is the same. MOH revises the TOSP on a rolling basis, and IPs align with those revisions. “With constantly advancing medical care, it is natural for policyholders to ask if their existing insurance coverage keeps pace with newer, less invasive procedures,” Gan said.
Critical illness insurance operates on a separate and more prescriptive model. Policies pay a fixed lump sum when a diagnosis or procedure meets conditions specified in the policy contract. The LIA maintains standardised definitions for severe-stage critical illnesses and updates them regularly to reflect medical advances. Insurers must apply the current definitions when issuing new policies but are not obligated to apply them to existing ones. Gan confirmed that existing policyholders remain on the definitions in force at the time of purchase unless an insurer chooses to extend updated terms at renewal.
The MAS response has broad relevance for the Singapore insurance market. According to LIA’s full-year 2024 results, approximately 2.97 million lives – roughly 71% of Singapore residents – held IPs on top of MediShield Life as of end-2024, reflecting a 1.8% increase in the number of lives covered by health insurance year-on-year, with around 40,000 more Singaporeans and Permanent Residents added over the course of 2024. By Q1 2025, IP coverage had grown further to 2.98 million lives, with approximately 44,000 additional residents covered in the quarter. New business premiums for individual health insurance reached S$201.3 million for Q1 2025, a 104.2% increase from the same period the prior year. IPs and IP rider premiums accounted for 90% of that total, or S$181.8 million, with the remaining 10% comprising other medical plans and riders. In 2024, the life insurance industry paid out S$1.94 billion for death, total and permanent disability, and critical illness claims – against a total industry payout of S$18.12 billion to policyholders and beneficiaries for the year, a 33.4% increase from 2023.
The MAS reply signals a preference for structured industry self-governance – through LIA’s periodic CI definition reviews and MOH’s regular TOSP updates – rather than direct regulatory intervention at the insurer or policy level. The response does not introduce new obligations on insurers toward existing policyholders.
