Monetary Authority of Singapore Annual Report 2012/2013

A ROBUST FINANCIAL CENTRE

Enhance Supervision of Insurers

MAS enhanced its insurance regulatory and supervisory framework on a number of fronts after several public consultations over the last few years. This included amendments to the Insurance Act (IA) to take into account global supervisory and market developments since its last major amendment in 2004. The amendments enhanced MAS’ powers to achieve its supervisory objectives, improved the clarity of existing policy positions, and aligned the IA with other MAS-administered Acts.

In April 2013, MAS extended the Corporate Governance Regulations beyond the significant life insurers to all locally incorporated direct insurers and reinsurers. In addition, the Corporate Governance Guidelines, which were previously applicable to only locally incorporated direct insurers, were extended to the locally incorporated reinsurers and captives.

To strengthen the standard of risk management amongst insurers, MAS issued a new Notice on Enterprise Risk Management (ERM) in April 2013. Under the ERM Notice, insurers are required to identify and manage the interdependencies between key risks, and to more effectively link these to their strategic management and capital planning within a framework guided by an explicit risk tolerance statement.

A new Notice on Public Disclosure requirements was also issued in April 2013. This Notice requires insurers to publicly disclose more comprehensive information on a timely basis. This will help members of the public, including policyholders, to obtain a clear view of an insurer’s business activities, performance and financial position.

MAS commenced a review of its Risk Based Capital (RBC) framework for insurance companies to keep pace with the evolving market practices and global regulatory developments. The review aims to improve the comprehensiveness of the types of risks covered and the risk sensitivity of the framework, as well as to redefine the solvency control levels. MAS is working in consultation with the industry to finalise the key components of the proposals by end 2013.