Insurance regulators in Asia are increasingly looking at areas such as customer protection and meeting policyholders' reasonable expectations (PREs), although these areas are still at a nascent stage in many of the markets in the region, according to a report by Milliman, a premier global consulting and actuarial firm.
In its report, entitled “Regulatory diversity across Asia”, Milliman provides an insightful analysis on current regulations applicable to life insurers across 14 Asian markets. These are Brunei, China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam.
The different markets are at very different stages of evolution—in general economic, social and demographic terms and in respect of the maturity of their various life insurance industries. Consequently, the insurance regulatory regimes vary significantly across the markets, often making it difficult for insurers to keep track of how the regulations change across the region.
Apart from the trend of regulators looking at customer protection and meeting policyholders’ PREs, key observations from the report include:
- The markets in Asia are still ‘rules-based’ (as opposed to ‘principle based’). Detailed rules and regulations govern different aspects of the industry.
- There is also an increasing focus on strengthening the governance environment through the Appointed Actuary/Chief Actuary systems and the role of board committees.
- There is a clear trend towards adoption of RBC (Risk Based Capital) regimes and the enhancement of such frameworks, wherever already adopted.