Source : The Straits Times, Oct 24, 2007
PEOPLE who are looking for a housing loan should be aware of DBS Bank's unwritten condition regarding assignment of mortgage policies.
Most financial planners advise that a mortgage-insurance policy be assigned to the financial institution providing the loan, to save on estate duty.
DBS does not accept the assignment of third-party insurance policies. However, it has no problems accepting an assignment when the mortgage insurance is purchased from its business partner.
DBS should make this clause known to potential clients, as such a condition is not stated anywhere in the offer letter, nor in its Standard Terms/Conditions of Housing Loans.
I hope the Consumers Association of Singapore and the Life Insurance Association will look into this anti-competitive measure by DBS. The bank is indirectly forcing clients to either purchase a policy from it, or live without assigning their existing policies.
With such a measure, DBS could charge a higher premium for the policies, and indeed this was what I found: premiums quoted were higher than what my current insurer charges.
Chong Chin Chuan
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