a Sound and Reputable Financial Centre
Resolution and Policy Owners’ Protection Fund
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.
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.