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
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
The Australian Prudential Regulation Authority (APRA) is seeking comments, until October 21, 2022, on the introduction of CPS 230, which is the new cross-industry prudential standard on operational risk management.
The European Commission published a Delegated Regulation 2022/1301 on the information to be provided in accordance with the simple, transparent, and standardized (STS) notification requirements for on-balance-sheet synthetic securitizations.
The Australian Prudential Regulation Authority (APRA) is announced revisions to the capital framework for authorized deposit-taking institutions to implement the "unquestionably strong" capital ratios and the Basel III reforms.
The European Banking Authority (EBA) published a report that examines the use of certain exemptions included in the large exposures regime under the Capital Requirements Regulation (CRR).
The Bank of England (BoE), the Prudential Regulation Authority (PRA), and the Financial Conduct Authority (FCA) published a joint discussion paper that sets out potential measures to oversee and strengthen the resilience of services provided by critical third parties to the financial sector in UK.
The Bank of England (BoE) issued a communication to firms to provide an update on the progress of the joint data transformation program—which is being led by BoE, the Financial Conduct Authority (FCA), and the industry—for the financial sector in UK.
The European Banking Authority (EBA) published the draft methodology, templates, and template guidance for the European Union-wide stress test in 2023.
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) jointly published the final guidelines on common procedures and methodologies for the supervisory review and evaluation process (SREP) for investment firms.