Media Releases
Published Date: 16 December 2005

MAS Invites Comments on Policy Owners' Protection Fund Scheme

Singapore, 16 December 2005... The Monetary Authority of Singapore (MAS) has released a consultation paper on draft recommendations to enhance the Policy Owners' Protection Fund (PPF) Scheme.

2   The failure or default of an insurer may result in financial distress to individual policy owners and may impact on the society and economy at large. The existence of a PPF to compensate policy owners in the event of the default of any registered direct life or general insurer can help to alleviate the financial hardship to the individual policy owner, limit the potential disruption to the society and economy and hence enhance public confidence in the insurance sector.

3   Currently, a PPF scheme is provided for in the Insurance Act to provide compensation to policy owners for life policies and compulsory insurance policies, such as motor third party bodily injury and Workmen's Compensation Act liability insurance, in the event of the default of an insurance company. MAS is reviewing the current PPF scheme to ensure that the scheme remains relevant, taking into account market developments. The review aims to provide adequate protection to policy owners while keeping the cost of PPF affordable, and achieving an equitable allocation of cost amongst insurers participating in the scheme. 

4   There are two phases in the review. The recommendations in this consultation paper are for the first phase.  It covers issues relating to membership, scope of coverage, level of coverage, continuity of insurance coverage, funding method and size of levies. The second phase of the review will focus on the implementation details of the PPF scheme including the structure, organisation and mandate of the PPF administrator, PPF payout procedures and public education of the scheme.  Further public consultations will be undertaken.

5   MAS invites comments on the consultation paper which can be found on the MAS website. (Click here to view the Consultation Paper (183.4 KB) ). Interested parties may submit their comments by 27 January 2006 to:

Insurance Supervision Department
Monetary Authority of Singapore
10 Shenton Way
MAS Building
Singapore 079117
Fax: (65) 6229 9694