policy owners’ protection fund (PPF)scheme
is a privately funded compensation scheme for policy
owners. It is aimed at reducing the financial impact
on individuals in the event of an insurer failure
or default. This scheme will enhance policy owners’ confidence
in the insurance industry and limit the potential
disruption to society and the economy.
MAS reviewed the PPF scheme, as provided for
in the IA since 1986 to ensure that the existing
PPF scheme was still relevant in light of market
There are two phases in the review. The first
phase of the review, which covers issues on membership,
coverage and funding of the PPF scheme has been
completed. MAS has finalised details of the recommendations,
taking into account the feedback received from
the public consultation in December 2005.
Some of the key changes to the PPF scheme include:
||Extending PPF coverage to all
Accidental & Health policies written
in the life or general insurance fund.
||Extending PPF coverage to certain selected
personal lines insurance policies such as
personal motor insurance, personal property
insurance and foreign domestic maid insurance.
||Setting up a credible pre-funded PPF through
imposing risk-based levies on participating
||Allowing risk-based levies to be charged
to the shareholders’ fund, subject
to certain limits.
The second and final phase of the review will
focus on the implementation details of the PPF
scheme. This covers the structure, organisation
and mandate of the PPF administrator, the payout
procedures and public education. MAS will conduct
further public consultations on these issues
before the implementation of the revised PPF