Insurance thought leadership

PwC Perspective - What does FAIR mean to your business?

The consultation paper was released on 5 March; 55 pages and 25 questions later, the MAS has signalled its broad support for the 28 recommendations made by the FAIR panel. It contains a detailed explanation of the rationale behind the MAS' support, sets out how the MAS view the changes working and finally the industry is given an indicative time line to comply.

We analysed the consultation paper and have distilled this perspective highlighting some of its key points.

Written comments should be provided no later than the 4th of June 2013.





MAS issues consultation paper on proposed public disclosure
requirements for insurers

The Monetary Authority of Singapore (“MAS”) has issued a consultation paper on the proposed public disclosure requirements for insurers. These disclosures would complement those that are already made within insurers' financial statements and MAS statutory returns. They are intended to enhance the reader's understanding of the risks that an insurer is exposed to, and how those risks are managed.

The proposals, which include discussion of an insurer’s control and governance structure, Asset & Liability Management framework and Enterprise Risk Management process, represent a likely increase in the volume of both qualitative and quantitative information disclosed to the public.

These proposals will affect all insurers and reinsurers which are incorporated in Singapore with the exception of captive insurers and marine mutual insurers.

MAS consults on Entreprise Risk Management ("ERM") for insurers

Following the MAS’ consultation paper on RBC 2 in August 2012, the expected consultation paper on ERM has now been published and will close for comments on 28 February 2013.

The requirements published are not in the form of detailed rules, but rather principles close to the Own Risk and Solvency Assessment (“ORSA”) Requirements under Solvency 2. The principle-based approach by MAS gives insurers the ability to tailor and enhance their risk management framework in line with the nature and complexity of their business.

We have summarised the main points in the pdf.

MAS responds to consultation on RBC 2

PwC is pleased to continue its series of updates on the new Risk Based Capital methodology (RBC2) being proposed by MAS.

At the Singapore Actuarial Society Life Insurance Conference on Thursday 8th November, MAS gave a brief update on the response to the consultation period conducted over July and August 2012. We have summarised the main points in our newsletter.

MAS reviews Risk-Based Capital framework

This edition of our PwC newsletter highlighting the key messages of the consultation paper, the timetable, the main areas of difference with the current RBC reporting framework, and some comparisons with Solvency II currently under implementation in the EU.

The key messages at a glance are:

  • Tight consultation and implementation timeline for a number of significant changes on calculations of capital requirements and available capital
  • Industry has the chance to influence the resulting impacts
  • Capital set at the 1 in 200 year event level (VaR at 99.5%)
  • Focus on standard model approach first; internal model to follow after 2013
  • Enterprise risk management framework to be developed (similar to the own risk self assessment (ORSA) concept under Solvency II)