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
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.