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Singapore Gov’t must guard against “inherent vices” when designing insurance policies, say academics


Beyond compassion and being pleasant to companies, the Singapore authorities has to additionally guard against the inherent vices in its insurance policies, mentioned the National University of Singapore Vice Provost of Student Life Associate Professor Leong Ching on Monday (19 July).

In a submit on LinkedIn, Assoc. Prof Leong described “inherent vices” because the “property of quality of any substance or object which causes itself to self-destruct”.

She defined, “Such vices are defined in relation to the risk they face – in art pieces, it could be a function of time or the unstable structure of the art piece itself such as the paint or materials used, whereas in maritime law it may be about the perishable nature of cargo – or simply that ships may sink.”

The affiliate professor then elaborated that these vices are excluded by insurers from compensations because the dangers as inherent within the objects themselves, which means that the contractors and carriers bear the burden of these dangers.

Relating this to coverage, Assoc. Prof Leong mentioned that she has argued that insurance policies do possess such inherent vices as effectively, “especially those designed in such a way as to attracting certain forms of risks – risks linked to uncertainty, maliciousness and non-compliance.”

She burdened, “In such instances, it is the duty of the policymaker to build in responses to such risks, which can be reasonably for seen.”

Referring to the current spike in instances linked to KTV lounges, Assoc. Prof Leong cited the 2 “defences” which have been tried in addressing the state of affairs.

The first defence is that KTVs being allowed to pivot to F&B operations was the Government attempting to assist companies. The different argument is that the “boyfriend” path to entry into the nation was an indication of compassion.

The “boyfriend” route refers to how one of many Vietnamese KTV hostesses was allowed entry into Singapore underneath the familial ties lane and was sponsored by her boyfriend.

Assoc Prof Leong went on to quote the argument’s conclusion that “The government tries to help” however that folks abuse the system and that “this is not a loophole”. The conclusion goes on to ask folks to cease blaming the federal government or foreigners however as a substitute responsible those that abuse the privileges and assist accessible to them and people “who cause problems for all of us”.

The affiliate professor countered that that is “NOT the moral of the story”.

She defined that whereas we’re entitled to carry accountable those that break the regulation, “we should also look at the loose policy design, which ignored, or at least, did not recognise fully, the inherent vices of both the KTV ‘pivot’ and the ‘boyfriend’ policy”.

“No one blames the government for trying to help,” she mentioned.

“But it cannot assume that compassion and being friendly to businesses are enough. It must also guard against the inherent risks present in the world.”

Assoc. Prof Leong then linked to an article by Canadian researcher Michael Howlett on his unique conception of inherent vice and coverage design.

Assoc. Prof Leong’s submit was shared on the platform by Senior Lecturer and Professor of Practice on the Hong Kong University of Science and Technology Professor Donald Low.

In a Facebook submit of his personal on Wednesday (21 July), Prof Low made related arguments, reiterating the purpose.

In his submit, Prof Low referenced Mr Howlett’s paper titled “Dealing with the Dark Side of Policy-Making: Managing Behavioural Risk and Volatility in Policy Designs” printed within the Journal of Comparative Policy Analysis in 2020.

“This is a very good paper that sheds light on why the arguments of ‘enforcement is always a cat-and-mouse game’, ‘the authorities are already very stretched’, and ‘individual responsibility is more effective than strict enforcement’ aren’t quite acceptable,” mentioned Prof Low.

The primary argument, mentioned Prof Low, is that good coverage design ought to consider the likelihood that recipients of the coverage would “engage in misconduct” resembling fraud or “gaming the system”, thus thwarting the federal government’s intentions.

Noting arguments from individuals who say that the authorities are to not be blamed for permitting KTVs to pivot to F&B operations as they’d good intentions and that it might be inconceivable for guidelines to be absolutely or fully enforced, Prof Low dismissed these as “unpersuasive”.

“I remember one of my first Permanent Secretaries telling me that good policy intentions are not an excuse for bad implementation or unintended outcomes,” he recalled.

Prof Low went on so as to add that an inadequately enforced rule is a “bad” one. He conceded that nobody expects good enforcement, nonetheless, the violations within the case of the KTV cluster gave the impression to be “blatant, egregious and widespread”.

“In this case, questions must be asked of those tasked with enforcing the rules, not just of those who violated the rules,” the professor concluded.

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