MAS to Beef up Protection for Insurance Policy Owners with Revised Scheme

The Financial Authority of Singapore (MAS) has introduced its intention to revise the Coverage House owners’ Safety Scheme.

This initiative, at the moment open for public session, is geared toward increasing protection, streamlining the scheme’s design, and bettering operational effectiveness.

Enhancing protection

The MAS suggests broadening the scheme to incorporate necessary third-party legal responsibility insurance coverage for particular mobility units like bicycles and motorised wheelchairs beneath the Lively Mobility Act 2017.

Moreover, the scheme will now embody private journey insurance coverage insurance policies issued to firms because the coverage proprietor (e.g. an employer, journey company, bank card firm), making certain safety for particular person vacationers.

To make the scheme extra clear, MAS plans to checklist lined and non-covered advantages in specified private line insurance coverage. Basic insurers taking part within the scheme shall be required to explicitly state excluded advantages of their coverage paperwork.

Additionally, to expedite declare settlements, the scheme could now cowl claims arising even after the insurer’s liquidation course of begins, barring coverage surrenders. This goals to scale back disruptions for customers throughout liquidation.

Simplification of scheme design

MAS can also be proposeing a uniform methodology for calculating refunds of unused premiums for basic insurance coverage insurance policies, aiding coverage homeowners in securing various protection.

One other proposal features a simplified calculation for optimum advantages beneath entire life, endowment, and time period insurance policies, primarily based solely on combination assured loss of life advantages.

This ensures that coverage homeowners with assured loss of life advantages as much as S$500,000 per life assured don’t expertise diminished combination loss of life advantages.

Enhancing operational effectivity

MAS, in collaboration with the Singapore Deposit Insurance coverage Company Restricted (SDIC), is refining the operational processes for scheme payouts within the occasion of an insurer’s failure.

This consists of defining the roles and tasks of concerned events, like MAS, SDIC, Scheme members, and liquidators, for varied payout situations.

Different operational enhancements embrace introducing an affordable time restrict for reporting eligible declare occasions to stability coverage homeowners’ pursuits with administrative value effectivity.

The session paper is on the market for evaluate, and MAS invitations feedback on the proposals till 16 February 2024.

Marcus Lim

Marcus Lim, Assistant Managing Director (Banking & Insurance coverage), MAS, mentioned,

“A sturdy Coverage House owners’ Safety Scheme enhances MAS’ continued supervisory and regulatory efforts to take care of belief and confidence in Singapore’s insurance coverage sector.”

In September, the regulator had designated AIA Singapore, Earnings Insurance coverage, Prudential Assurance Firm Singapore, and Nice Japanese Life Assurance Firm because the 4 home systemically necessary insurers (D-SIIs).

These 4 insurers would face larger capital necessities based on a D-SII framework that may come into impact on 1 January 2024 as components of its efforts to strengthen the resilience of the monetary sector.