Jurisdiction - Singapore
Singapore – Monetary Authority to Consult on Enhancing Risk Capital Framework.

31 March, 2012


Legal News & Analysis – Asia Pacific – Singapore – Insurance & Reinsurance


Mr Lee Boon Ngiap, Assistant Managing Director of the Monetary Authority of Singapore (MAS), announced on 27 March 2012 that the MAS will shortly issue a consultation paper to propose enhancements to its risk-based capital (RBC) framework for insurance companies. 

Singapore first introduced a RBC framework for insurance companies in 2005 and this is the first time, since its introduction, that it has been reviewed. The proposed enhancements aim to improve the comprehensiveness of risk-coverage and the risk-sensitiveness of the framework, while ensuring that the proposals are practical and take into account market realities. Mr Lee highlighted that, unlike in banking, in the insurance industry there is no common global capital standard for insurance companies. Therefore, a review of the Singapore RBC framework would be a major undertaking requiring an in depth analysis of the appropriateness of Singapore's current RBC framework as well as a comparative study of the insurance RBC frameworks in other jurisdictions.
Mr Lee was speaking at the recent General Insurance Association of Singapore's (GIAS) annual general meeting and he made the announcement whilst discussing the requirement for the insurance industry in Singapore to maintain pace with global regulatory reforms. Mr Lee also emphasised that good corporate governance matters, pointing out that the MAS had published on 22 February 2012 (although the consultation period has now closed) a consultation paper proposing to extend the Insurance Corporate Governance Regulations to all locally incorporated insurers. The MAS' efforts in respect of improving risk management standards and how such efforts would continue apace were also highlighted.
The full transcript of Mr Lee's speech to the GIAS can be seen here.


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