MAS Implements New Risk-Based Capital Framework for Insurers in Singapore
Singapore, 25 August 2004...The Monetary Authority of Singapore (MAS) today announced the new risk-based capital (RBC) framework for insurers in Singapore. In conjunction with the new RBC framework, MAS also issued the following regulations, notice and guidelines:
Insurance (Valuation And Capital) Regulations 2004
Insurance (Accounts And Statements) Regulations 2004
Insurance (Actuaries) Regulations 2004
Insurance (Transitional And Savings Provisions) Regulations 2004
Notice on Valuation of Policy Liabilities of Life Business
Guidelines on Valuation of Policy Liabilities of General Business
2 The RBC framework aims to put in place a more transparent and risk-focused capital and valuation basis that reflects all major financial risks of insurers. It was developed in close consultation with insurance practitioners and the actuarial and accounting professions. MAS previously issued two consultations papers to discuss how the RBC framework and regulations will be integrated into the Insurance Act. The last consultation was on 28 November 2003. MAS has considered the feedback received and incorporated them into the framework, where appropriate.
3 The framework takes into account emerging international standards and good practices in developed countries. The shift from a one-size fits all approach will also encourage insurance companies in Singapore to manage their financial risk more actively and raise overall prudential standards.
4 The RBC framework comes into effect immediately. However, registered insurers in Singapore have until 1 January 2005 to comply with the new requirements. During the transition period, existing requirements will apply to insurers that have not adopted the new framework.