Singapore: Next round of risk-based capital study scheduled in Q2
Source: Asia Insurance Review | Apr 2015
The Monetary Authority of Singapore (MAS) will conduct another round of its Quantitative Impact Study (QIS) in the second quarter of this year to evaluate the effect of an enhanced risk-based capital (RBC2) proposal on insurance companies, said its Deputy Managing Director (Financial Supervision) Ong Chong Tee.
Analysts expect that the exercise would help finalise the calibration of the various factors for RBC2 sometime this year, with the new framework set to be effective from January 2017.
Speaking at the Life Insurance Association’s (LIA) annual luncheon last month, Mr Ong assured the industry that the new capital framework will be “fit-for-purpose and not hamper well managed insurance businesses unduly”.
“Some industry players are naturally anxious if they will still have to maintain the same high buffers of way above 100% CAR under RBC2, as they do currently for RBC. This is not our expectation, given that the risk requirements under RBC2 are designed to be more risk sensitive, comprehensive and calibrated to a higher target confidence level,” he said.
Web aggregator to be in place by April
On a separate note, the Financial Advisory Industry Review (FAIR) initiatives relating to a web aggregator as well as the direct purchase of selected insurance products will be in place by this month, said Mr Ong.
Once ready, consumers in Singapore can bypass traditional channels and buy selected insurance products directly from insurers.