MAS: Annual report 2006 / 2007
CONTENTS
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ENTERPRISE: Our Role
BUILDING ON A ROBUST MACROECONOMIC ENVIRONMENT
DEVELOPMENTS IN THE SINGAPORE SECURITIES MARKET
FOSTERING A SOUND & REPUTABLE FINANCIAL CENTRE
RISK MANAGEMENT & INFRASTRUCTURE
GROWING SINGAPORE AS AN INTERNATIONALLY COMPETITIVE FINANCIAL CENTRE
CURRENCY
ORGANISATIONAL INITIATIVES
FOSTERING A SOUND & REPUTABLE FINANCIAL CENTRE 25
Changes to Capital Requirements for Singapore-incorporated Banks 25
Enhancing MAS’ Role in Bank Resolution 25
Changes to Rules on Unsecured Credit 25
Shift Towards Large Exposures Regime 26
Introduction of Asset Maintenance for Foreign Banks 26
Box 3 - An Update On Basel II Implementation In Singapore 26
Legislative Amendments to Securities and Futures Act and Financial Advisers Act 27
Box 4 - Monograph On Supervisory Framework For Financial Institutions 27
T rust Companies 28
Self-assessment Initiative 28
Anti-Money Laundering & Countering the Financing of Terrorism 28
Building Confidence in E-payments and Internet Banking Systems 28
Insurance Securitisation 29
Nomination of Beneficiaries to Insurance Policies 29
Policy Owners’ Protection Fund 29
Box 5 - Supervision Of New Initiatives in the  
  Singapore Capital Markets - Jade And AsiaClear 30
Mortgage Insurance 30
Thematic Approach to Market Conduct Supervision 30
Box 6 - Market Manipulation 31
Mystery Shopping on Practices in the Financial Advisory Industry 31
Review on Switching of Investment Products 31
Enhancing Market Discipline 31
Corporate Governance of Listed Companies 32
Amendment to Code on Collective Investment Schemes 32
Implementation of Payment Systems (Oversight) Act 2006 32
 
Policy Owners’ Protection Fund
The policy owners' protection fund (PPF) scheme is an industry funded compensation scheme for insurance policy owners. It will reduce the financial impact on individuals if there is 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 is reviewing the PPF scheme, which has been in the Insurance Act since 1985, to ensure that it is still relevant. There are two phases to the review. The first phase of the review covering issues on membership, coverage and funding of the PPF scheme has been completed. We have 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 accident & 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 worker insurance;
  • setting up a credible pre-funded PPF by imposing risk-based levies on participating insurers; and
  • allowing risk-based levies to be charged to the insurance fund, subject to certain limits

The second 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 another public consultation on these issues before the implementation of the revised PPF scheme.