Singapore, 18 April 2017... The Monetary Authority of Singapore (MAS) today released a public consultation to review the Policy Owners’ Protection Scheme (PPF Scheme), to ensure that the PPF Scheme remained relevant in the face of market developments. The PPF Scheme provides compensation to policy owners for all life insurance policies and certain general insurance policies1 in the event of default of any licensed direct life or general insurer.
2 MAS proposes that a “personal” insurance policy be defined as one that is owned by an individual; this will allow claims on damage to properties owned and used by individuals to be protected under the PPF Scheme, even if these properties are sometimes used for commercial purposes. Examples of such properties include privately owned cars used for hire and reward and home offices. This proposal recognises the growing trend of individuals using their personal properties for commercial purposes, who nonetheless deserve protection under the PPF Scheme.
3 Another key proposal is to exclude certain high value property damage claims from protection under the PPF Scheme. Specifically, MAS proposes to implement, on a per policy basis, a cap of:
a) $50,000 for own property damage motor claims, under personal motor insurance policies; and
b) $300,000 for property damage claims, under personal property (structure and contents) insurance policies.
The caps will help keep PPF levies and insurance premiums affordable for the scheme members and consumers respectively. The caps have also been calibrated for the PPF Scheme to fully cover more than 99 percent of such claims, based on industry data over the past few years. The introduction of caps is also aligned with practices in other jurisdictions which have in place similar schemes.
1 ‘Certain general insurance policies’ refer to accident and health policies, insurance that are required by law, and Singapore policies of specified personal lines, such as personal motor and personal property (structure and contents) insurance.