Monetary Authority of Singapore Annual Report 2010/2011
Our Work

Insurance Resolution and Policy Owners' Protection

MAS reviewed the life and general insurance Policy Owners' Protection (PPF) schemes which are provided for in the Insurance Act (IA) since 1986. Two separate consultation papers were issued in December 2005 and December 2009 respectively, which discussed policy proposals relating to the PPF schemes, including the membership, scope and level of PPF coverage, continuity of insurance coverage, and funding method. Recently, MAS consulted on the draft Deposit Insurance and Policy Owners' Protection Schemes (DI-PPF) Bill in December 2010. A 3rd consultation paper on the target fund size and levies as well as the subsidiary legislation necessary for the implementation of the PPF schemes was issued in May 2011. The legislative amendments came into effect on 1 May 2011.

In conjunction with the review of the PPF schemes, MAS amended the IA to enhance its powers relating to the resolution of insurers to strengthen MAS' ability to secure continuity in insurance coverage, particularly for life policies. Continuity of coverage is important as life policies 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.