Featured Product

    MAS Amends Risk-Based Capital Framework Requirements for Insurers

    February 28, 2020

    MAS published a circular that informs all licensed insurers about the issuance of the Insurance (Valuation and Capital) (Amendment) Regulations 2020 and of the new MAS Notice 133 on Valuation and Capital Framework for insurers in Singapore. The Regulations and Notice sets out requirements under the risk-based capital framework for all licensed insurers, including the way in which assets and liabilities are to be valued. The Insurance (Valuation and Capital) (Amendment) Regulations 2020 and MAS Notice 133 will come into effect on March 31, 2020.

    The circular states that review of the valuation and capital framework for insurers in Singapore (RBC 2 review) has gone through extensive rounds of public and industry consultations as well as quantitative testing. The circular also informs that the relevant legislation to give effect to the enhanced valuation and capital framework (RBC 2) has been finalized. In this context, MAS has issued the Insurance (Valuation and Capital) (Amendment) Regulations 2020 to amend the existing Insurance (Valuation and Capital) Regulations 2004. The main changes relate to the introduction of two solvency intervention levels and the associated supervisory actions for not meeting these levels, in addition to the requirement to meet the fund solvency requirement at a broader adjusted fund instead of the insurance fund level.

    Notice 133 has also been issued following the RBC 2 review and comprises both mandatory requirements and guidelines on the supervisory intervention levels, valuation of policy liabilities in respect of life business and general business, and the calculation of the total risk requirements and financial resources. Notice 319 and the Guidelines ID 1/04 on Valuation of Policy Liabilities of General Business will be cancelled once MAS Notice 133 takes effect, since relevant requirements and guidance on valuation of liabilities have been incorporated into MAS Notice 133. MAS will issue updated guidelines on the preparation of the actuarial investigation report (as required under Section 37(1) of the Insurance Act) in the second quarter of 2020. Insurers should reference the revised guidelines in preparing actuarial investigation reports that are to be submitted by March 31, 2021. The Notice takes effect on March 31, 2020, with the exception of section 6.4 and paragraph 10 in Appendix 5E, which shall take effect on January 01, 2022.

    The statutory returns for the quarter ending March 31, 2020 are to be prepared on RBC 2 basis and are due on April 21, 2020. Consequential amendments will be made to the relevant legislation to include references to MAS Notice 133 as well as update references as a result of amendments to the Valuation and Capital Regulations, where applicable. These amendments will be finalized and issued next week. MAS will be sending letters, where relevant, to insurers in respect of RBC 2 related issues which are applicable to the insurer, such as any applicable capital add-on, approval of the use of matching adjustment and updates on exemptions granted under the previous capital framework. As communicated in Circular No. ID 03/20, insurers are to submit the parallel-run results for the year ending December 31, 2019 to MAS by May 30, 2020. The completed workbooks, which have been shared earlier on January 21, 2020, should be submitted by the insurer via to the liaison officer in MAS, using AES 256 encryption or higher.

     

    Effective Date: March 31, 2020

    Keywords: Asia Pacific, Singapore, Insurance, Reinsurance, MAS Notice 133, Risk-Based Capital, RBC 2, Capital Adequacy, Valuation and Capital Regulation, MAS

    Featured Experts
    Related Articles
    News

    CFPB Finalizes Rule on Small Business Lending Data Collection

    The Consumer Financial Protection Bureau (CFPB) published a final rule that sets out data collection requirements on small business lending, under section 1071 of the Dodd-Frank Act.

    March 30, 2023 WebPage Regulatory News
    News

    BCBS to Consult on Pillar 3 Climate Risk Disclosures by End of 2023

    The Bank for International Settlements (BIS) published a summary of the recent Basel Committee (BCBS) meetings.

    March 23, 2023 WebPage Regulatory News
    News

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News
    News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News
    News

    US Congress Report Examines Data Privacy and Cybersecurity Regulations

    The U.S. Congressional Research Service published a report on banking, data privacy, and cybersecurity regulation.

    March 13, 2023 WebPage Regulatory News
    News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News
    News

    EU to Conduct One-Off Scenario Analysis to Assess Transition Risk

    The European authorities recently made multiple announcements that impact the banking sector.

    March 10, 2023 WebPage Regulatory News
    News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News
    News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News
    News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8810