MAS Publishes Inaugural List of Domestic Systemically Important Insurers in Singapore
Singapore, 21 September 2023... The Monetary Authority of Singapore (MAS) today published its framework for designating domestic systemically important insurers (D-SIIs), and the inaugural list of four D-SIIs:
- AIA Singapore Private Limited
- Income Insurance Limited
- Prudential Assurance Company Singapore (Pte) Limited; and
- The Great Eastern Life Assurance Company Limited.
2. The D-SII framework will come into effect on 1 January 2024. It formalises and updates an existing framework
3. Insurers whose failures are assessed to have a significant impact on the financial system and broader economy in Singapore will be formally designated as D-SIIs and subject to additional supervisory measures
- Higher capital requirements – A 25% capital add-on will apply, increasing a D-SII’s higher and lower supervisory intervention levels, as well as Common Equity Tier 1 (CET1) and Tier 1 capital requirements
CET1 capital represents the highest quality capital. Examples of CET1 capital include paid-up capital, retained earnings and insurance funds surpluses etc. Tier 1 capital comprises CET1 capital and Additional Tier 1 capital instruments.. This add-on replaces the 25% high impact surcharge applicable to the four D-SIIs under the existing framework.
- Recovery and resolution preparedness - Recovery planning will bolster an insurer’s ability to restore its financial strength and viability in a period of distress. Resolution planning will enhance MAS’ ability to ensure the timely and orderly restructuring or exit of an insurer if it fails, so as to minimise impact to the financial system and economy.
4. Given their current capital positions, the four D-SIIs are expected to continue meeting the capital requirements under the D-SII framework with adequate buffers. MAS has also been engaging the four D-SIIs on recovery planning.
5. Ms Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS, said, “Enhancing the D-SII framework is part of MAS’ continuous efforts to strengthen the resilience of Singapore’s financial sector. It ensures that domestic systemically important insurers are subject to higher regulatory standards and closer supervision.”
6. More information on the D-SII framework, including the process for designating D-SIIs, can be found . MAS’ response to feedback received from the public consultation on the D-SII framework can be found .
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