Page 16 - AEC Digital Edition

Implementation of the AEC and impact on
the insurance industry – Are we ready?

DLA Piper Partners Peter Shelford and Joyce Chan, and Consultant Robert Tang, evaluate some of the
challenges towards greater liberalisation of the insurance market, while affirming the need for companies to
be ready to take advantage of the changes as the market slowly opens up.

The much-anticipated goal was to implement the be substantially no restrictions to ASEAN suppliers in
ASEAN Economic Community (AEC) by 31 December providing services and establishing companies across
2015, thereby forming a single market and production national borders within the region, subject to domestic
base across ASEAN member countries (AMC). The insurance regulations.
industry will have many opportunities to explore and
challenges to overcome as the AMC continue their progress The Blueprint stipulates that the liberalisation of
to integrate the market across the ASEAN region. As we insurance services will cover four “modes” of supply for the
approach the end of 2015, however, economic integration delivery of services in cross-border trade, which consist of:
still seems some way off. • “Cross-border supply”, eg, an insurer based in Singapore

The ASEAN economic blueprint and the insurance writing policies for policy holders based in Indonesia;
industry • “Consumption abroad”, eg, a policy holder based in

In November 2007, the ASEAN leaders adopted the ASEAN Malaysia travelling to Singapore to buy a policy from an
Economic Blueprint (Blueprint) to serve as a master plan insurer based there;
in guiding the implementation of the AEC by 31 December • “Commercial presence”, eg, an insurer based in
this year. At that time, “free flow of services” was one of Singapore writing policies in Thailand through the
the five agreed core focus areas in the implementation Singapore insurer’s Thai branch or subsidiary; and
of a single market. According to the Blueprint, there will • “Presence of natural persons”, eg, an insurer based
in Singapore managing a claim through an employee
working in Thailand.

The rapid growth of ASEAN economies will directly boost demand for commercial lines of insurance.
(Bangkok, Thailand)

14 AEC – IMPACT ON INSURANCE • DECEMBER 2015 Back to Contents