Key Supervisory and Regulatory Initiatives RISK-BASED REGULATORY REGIME Implementing a Risk-based Capital Framework for Insurers On 23 August 2004, MAS implemented the new risk-based capital (RBC) framework for insurers in Singapore. Compliance with the framework became a mandatory requirement for all direct insurers on 1 January 2005. This milestone framework was the outcome of four years of extensive study and close consultation with the insurance industry. MAS conducted industry briefings and several tests to assess the robustness of the new framework. We also visited the companies to assess their valuation processes and the readiness of their systems to implement the framework. The RBC framework puts in place a more transparent and risk-focused capital and valuation system that reflects all major financial risks of insurers. The new approach encourages insurance companies in Singapore to manage their financial risk more actively, thus raising overall prudential standards in the industry.