MAS announces new Insurance Intermediaries Act and issues new Regulations for Insurance Intermediaries
All will come into effect on 31 Dec 1999
Singapore, 28 December 1999... MAS today announced the introduction of the Insurance Intermediaries Act which will come into effect on 31 Dec 1999. At the same time, the Authority also issued the Insurance Intermediaries Regulations 1999 and Insurance (Amendment) Regulations 1999. Both regulations will take effect from 31 December 1999.
2 Passed in August 1999, the Insurance Intermediaries Act aims to promote greater professionalism in the insurance industry and enhance protection for the insuring public. Brokers wanting to carry on insurance business in Singapore will have to register with MAS and comply with the stipulated regulatory requirements. The Insurance Intermediaries Act also formalises the current industry requirement that any person wanting to act as an agent for a registered insurer will need to have a written agency contract with that insurer. Application forms for the registration of brokers are available at the Insurance Department, MAS.
3 For the new Insurance Intermediaries Regulations 1999, key requirements include:
i) Meeting a minimum paid-up capital and maintaining a net asset value 4 The minimum paid-up capital for direct general, general and life reinsurance brokers is $300,000. Direct life brokers will have to meet an initial minimum paid-up capital of $100,000, which will be increased progressively to $300,000 over a 5-year period.
5 All brokers must maintain a net asset value of at least 50% of their minimum paid-up capital at all times. This is to establish brokers' commitment to operate in Singapore and to ensure that they have a certain level of financial assets to support their operations.
ii) Maintaining professional indemnity insurance cover 6 All registered brokers must maintain professional indemnity covers with deductible, if any, of not more than 20% of the net asset value of the company. For direct general, general and life reinsurance brokers, the minimum cover is $1 million while that for direct life brokers is $500,000. This is to safeguard the insuring public's interest against wrongful advice and financial loss due to broker's negligence.
iii) Submitting audited annual returns 7 All registered insurance brokers must submit audited annual returns to MAS within 6 months from the close of their accounting period. This is to enable MAS to monitor the brokers' performance and assess their financial positions as well as to ensure that they comply with the provisions of the Insurance Intermediaries Act and Regulations.
iv) Paying an annual fee 8 The annual fee for registered direct general insurance brokers is $7,000. For general reinsurance and direct life insurance brokers, it is $5,000 while for life reinsurance brokers, the fee is $2,500. An agent or broker registered to place business with Lloyd's in London will be required to pay an annual fee of $5,000.
9 Arising from the introduction of the new Insurance Intermediaries Regulations, MAS introduced two consequential amendments to the existing Insurance Regulations. Regulations 30 and 33 of the Insurance Regulations, which provide for exemption for overseas placement of direct insurance risks with Protection & Indemnity Clubs and payment of annual fees to act as agent or broker for Lloyd's in London respectively, are repealed as they are provided for in the Insurance Intermediaries Regulations.
10 Copies of the Insurance Intermediaries Act, the Insurance Intermediaries Regulations 1999 and the Insurance (Amendment) Regulations 1999 can be obtained from the eGazette website at http://www.egazette.com.sg.