A Group policy disaster


  1. The group was formed by an insurance broker that allowed anyone to join the FBA group (FBA is abbreviation for Foreign Businessman’s Association). I have been unable to find a registered Foreign Businessman’s Association, so I suspect it was simply the name for the group.


  1. At the start, the collective average age of the group members was relatively low. Younger groups of people tend to have lower medical claims costs allowing insurance companies to offer lower premiums.


  1. The group grew very rapidly. Members were able to join simply by signing up through the insurance broker. No special requirements were needed to join this group, new members only had to fill in an application form.


  1. The health insurance company started losing a greater and greater percentage of new business each year to the group because of applicants choose to join the group at half price instead of paying the normal premium for the same level of health cover.


  1. As the group grew larger, so did the volume and cost of medical claims. Each year, the members became one year older…….they posed an increased risk of expensive medical claims.


  1. As the group members were paying only 50% of the premium rate of individual policy-holders insured with the same benefits by the same insurance company, there was soon insufficient income to cover the ever-increasing claims.


  1. Eventually, the health insurance company management decided that they were not a charitable organization and refused to renew this group policy.


  1. The insurance broker was able to convince another company, a competing health insurance company, to take over the group with similar benefits (with the same 50% premium discount).


  1. After 2 years, the new insurance company refused to renew the group policy.


  1. The broker was unable to find another insurer to take over the group with similar benefits (and 50% premium discount). This broker, either due to their lack of experience or unprofessional-ism, did not ask insurance companies for more acceptable terms (a lower broker commission and a lower premium discount for the group, 10-20% would have been realistic and sustainable).


  1. This broker is still in business and to the best of my knowledge, has not been fined or charged for any crime/negligence because of what they did to all the unsuspecting group members. Trusting policy-holders were led to believe that they had a reliable insurance policy covering their health. At the end of the day, these unsuspecting members were forced to apply for health insurance with a new company and declare all medical conditions that may or may not be covered by the new company.


  1. The healthy group members had no problem when applying for a new policy; the members that had serious medical conditions were screwed…..their current medical conditions are no longer covered because these conditions are now regarded as pre-existing medical conditions on any new policy. The ones with sufficient financial resources have no problem paying added medical costs;  the ones that aren’t so lucky, will die prematurely.