MAS Finalises Proposed Enhancements to Deposit Insurance Scheme and Policy Owners’ Protection Scheme
Singapore, 17 May 2018... The Monetary Authority of Singapore (MAS) has finalised proposed enhancements to the Deposit Insurance (DI) Scheme and Policy Owners’ Protection (PPF) Scheme. This follows from the public consultations in September 2014, April 2017 and August 20171. The proposed enhancements will strengthen protection for depositors and policy owners, and improve the operational efficiency of the Schemes.
2 There is broad support from many stakeholders for the proposals, which include:
increasing DI coverage from S$50,000 to S$75,000 per depositor in Singapore;
clarifying a “personal” insurance policy under the PPF Scheme as one that is owned by a natural person2; and
setting under the PPF Scheme, a cap of:
a) S$50,000 for own property damage motor claims, under personal motor insurance policies; and
b) S$300,000 for property damage claims, under personal property (structure and contents) insurance policies.
3 The relevant legislative amendments will now be submitted to Parliament for approval. MAS intends to effect the enhancements to the DI Scheme and PPF Scheme on 1 April 2019. This will provide Scheme members with sufficient lead time to put in place procedures to cater to the revised DI coverage limit and the introduction of caps for certain types of PPF policies.
4 MAS thanks all respondents for their feedback. MAS’ responses to the feedback received can be found on the MAS website in this link (1.2 MB).
(A) DI Scheme
(i) The DI Scheme in Singapore was established in 2006 with the primary objective of protecting small depositors. The Scheme protects deposits in savings, current and fixed deposit accounts that are held with full banks and finance companies. The Singapore Deposit Insurance Corporation (SDIC) is responsible for administering the DI Scheme and providing timely compensation for insured depositors in the event of a DI payout.
(ii) MAS, in consultation with SDIC, conducts periodic reviews of the DI Scheme to ensure adequacy of depositor protection while limiting the cost of the Scheme. The last review was in May 2011, and key enhancements included the increase in DI coverage limit from $20,000 to $50,000.
(B) PPF Scheme
(i) The PPF Scheme protects policy owners for all life insurance policies and certain general insurance policies in the event of failure of a life or general insurer. Such general insurance policies include 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. The Scheme was last reviewed in 2011, following enactment of the Deposit Insurance and Policy Owners’ Protection Schemes Act. The PPF Scheme is also administered by the SDIC.