MAS Issues Technical Specifications for RBC2 Parallel Run for Insurers
MAS issued technical specifications for RBC 2 parallel run for the year ending December 31, 2018 for insurers in Singapore. The parallel run will allow insurers and MAS to assess the impact of the updated RBC 2 proposals on capital positions and the wider business and strategic implications when RBC 2 becomes effective on January 01, 2020. The results and questionnaire are to be submitted to MAS in the format specified no later than July 02, 2019.
This set of technical specifications sets out the updated policy positions on the RBC 2 framework on matching adjustment, illiquidity premium, and recognition of internal credit rating model or process for unrated corporate bonds. All insurers, with the exception of captives, Lloyd’s insurers and marine mutuals, are required to conduct the parallel run for the year ended 31 December 2018, based on the instructions set out in the technical specifications. Key changes to the previous technical specifications have been highlighted. There remain but a few areas, such as the treatment of infrastructure investments and securitized assets and calibration of the general insurance catastrophe risk requirement, which MAS intends to consult with the industry in due course this year. So far, MAS has conducted three rounds of impact studies on the RBC 2 proposals. The most recent impact study was conducted from September to November 2018. All insurers (with the exception of captives, Lloyd’s insurers and marine mutuals) participated in the 2018 impact study. MAS expects to conduct a final parallel run for the year ended December 31, 2019.
Locally incorporated reinsurers, which are headquartered in Singapore (where MAS is the home supervisor), are to assume that RBC 2 will be applied immediately on its offshore insurance funds as well as its branches for the purpose of the parallel run based on the December 31, 2018 valuation date. Locally incorporated reinsurers that are headquartered overseas (where MAS is not the home supervisor) will continue to be subject to the current simplified solvency requirements, while reinsurance branches will be exempt from solvency requirements for the offshore insurance fund.
Keywords: Asia Pacific, Singapore, Insurance, Risk-Based Capital, Capital Adequacy, RBC 2, Parallel Run, MAS
Previous Article
FED Publishes Financial Stability Report in May 2019Related Articles
HKMA Announces Repayment Deferment Under Payment Holiday Scheme
HKMA, together with the Banking Sector Small and Medium-Size Enterprise (SME) Lending Coordination Mechanism, announced a ninety-day repayment deferment for trade facilities under the Pre-approved Principal Payment Holiday Scheme.
ESRB Paper Presents Alternative Approach to EBA Stress Test Proposal
The Advisory Scientific Committee of ESRB published a response, in the form of an Insights Paper, to the EBA proposals for reforms to the stress testing framework in EU.
MAS Announces Key Initiatives to Support Adoption of SORA
MAS announced several initiatives to support adoption of the Singapore Overnight Rate Average (SORA), which is administered by MAS.
BoE Updates Template and Definitions for Form ER
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
PRA to Extend Temporary High Balance Coverage Amid COVID Crisis
PRA published the policy statement PS19/20 on the final policy for extending coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balance.
EBA Publishes Standards on Disclosure and Reporting of MREL and TLAC
EBA published the final draft implementing technical standards for disclosures and reporting on the minimum requirements for own funds and eligible liabilities (MREL) and the total loss-absorbing capacity (TLAC) requirements in EU.
EBA Releases Erratum for Phase 2 Package on Reporting Framework 2.10
EBA published an erratum for the phase 2 of technical package on the reporting framework 2.10.
EC Sets Out Updated Technical Information for Solvency II Calculations
EC published the Implementing Regulation 2020/1145, which lays down technical information for calculation of technical provisions and basic own funds.
US Agencies Issue Statement on Additional COVID-19 Loan Accommodations
FFIEC, on behalf of its members that include US Agencies such as CFPB, FDIC, FED, NCUA, and OCC, issued a joint statement that sets out prudent risk management and consumer protection principles for financial institutions to consider while working with borrowers.
PRA Consults on Implementation of Certain Provisions of CRD5
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
