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Fostering a Sound and Reputable Financial Centre

Insurance Resolution and Policy Owners’ Protection Fund (PPF)

To ensure that the existing Policy Owners’ Protection Fund (PPF) schemes remain relevant in light of market developments, MAS is reviewing the life and general insurance PPF schemes, currently provided for in the Insurance Act. The first phase of the review, which covered issues on membership, scope and level of coverage, continuity of coverage as well as funding of the PPF schemes was completed in August 2006.

In December 2009, MAS issued a consultation paper on the second phase of the review. This focused on implementation issues, such as governance and administration of the schemes, management of the PPF funds, collection of levies, payouts using PPF funds and priority ranking of policy liabilities. It also revisited some of the issues covered in the first phase of the review to take into account developments since then.

In conjunction with the review of the PPF schemes, MAS also intends to enhance its powers and review its options relating to the resolution of insurers. Enhancing MAS’ powers in insurance resolution will strengthen its ability to secure continuity of insurance coverage, particularly for life policies. Continuity of coverage is important because policies written by life insurers tend to be long-term in nature, and early termination of the policies could cause a substantial loss to the policy owner due to a low surrender value or inability to take up new insurance cover due to advanced age or deteriorating health.

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