Risk-Based Capital Framework
MAS conducted the second consultation in March 2014 on its review of the insurance risk-based capital framework (RBC 2). Following the consultation, MAS has been actively engaging the insurers, industry associations, external auditors and consultants, as well as the actuarial profession to further exchange views on RBC 2. MAS also conducted a comprehensive quantitative impact study (QIS) alongside the second consultation. Results showed that most insurers remained adequately capitalised under the proposed framework.

MAS is reviewing the consultation feedback and will be refining the proposed framework to consider the feedback received. Specifically, MAS is considering moderating the calibration of asset and operational risk charges, recognising more diversification benefits and widening the eligibility criteria of the matching adjustment proposal. MAS is also exploring the possibility of giving some credit to the illiquid nature of other liabilities that do not qualify for the matching adjustment.

MAS will embark on another stage of consultation and conduct an additional QIS in 2015. MAS will continue to work closely with the industry to ensure that RBC 2 will be fit-for-purpose and support well-managed insurance businesses.

Review of Regulatory Framework for Health Plans
Following Prime Minister Lee Hsien Loong's 2013 National Day Rally speech, the MediShield Life Review Committee (MLRC) was formed to review the proposed parameters for MediShield Life to provide universal health coverage. The MLRC made a list of recommendations on MediShield Life and Integrated Shield Plans (IPs), including enhancing the regulatory and accountability framework for IPs so that policyholders can make informed decisions regarding their healthcare financing needs.

Following MLRC's recommendations, MAS worked with the Ministry of Health and the life insurance industry on measures to enhance disclosure requirements, strengthen protection for policyholders and improve the quality of conduct of intermediaries for the IPs. Some of these proposed measures include:

  • Requiring insurers to include standardised disclosure information pertaining to premium rates, benefit coverage and switching;
  • Restricting the use of the word "Shield" in the naming of accident and health policies to those that are Medisave-approved to avoid confusion with the non Medisave-approved policies;
  • Enhancing the competency of insurance intermediaries selling IPs by imposing a minimum number of training hours pertaining to MediShield Life and IPs; and
  • Requiring insurance intermediaries to disclose the total distribution cost upfront and enquire about the policyholder's preference for the type of ward during the fact-find and needs analysis process.

MAS has also reviewed the regulatory framework for accident and health insurance policies to ensure that the proposed measures similarly apply to the non Medisave-approved policies. MAS is currently reviewing the feedback received from its consultation on the proposed measures conducted in Q2 2015.