BY ADRIAN TAN
In the recent climate of fear due to a spate of retrenchments, the debate on unemployment insurance has intensified. However, unemployment insurance is not a new idea to Singapore as there have been previous attempts to run such plans.
As an insurance scheme, policy holders contribute funds into a common pool, which can be tapped on should the policyholders hit certain requirements.
Hence, the concept of unemployment insurance (where premiums are typically paid by the workers and companies), is fundamentally different from the concept of unemployment benefits (a welfare scheme where unemployed workers receive an allowance from the government).
Organisations which have rolled out unemployment insurance-related plans include NTUC Income, Singapore Professionals and Executives Cooperate (SPEC), and Pana Harrison. These plans were unsuccessful as the claims exceeded what the insurers were prepared to pay, or the take-up rate was low.
For example, NTUC Income launched a Retrenchment Insurance Plan in 2004 for all Singaporeans and PRs who were Income policyholders. The take-up rate was not sufficient, causing the plan to be withdrawn.
Regardless of these failures to implement a full-scale unemployment or retrenchment-related insurance plan, there are still insurance plans that incorporate an element of unemployment or retrenchment-related coverage
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