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Asian News - Singapore: MAS proposes lower capital requirements for insurers

Source: Asia Insurance Review | Aug 2016

MAS is proposing lower capital requirements for equity investment, credit spread, counterparty default and operational risk for insurers, to more accurately reflect the risk profile. The proposal is set out in MAS’s third consultation paper on proposed revisions to the Risk-Based Capital (RBC) framework for insurers, taking into account feedback from the industry. 
 
   Another key revision is that the discounting of life insurance liabilities has been adjusted to reduce the impact of short-term volatility on insurers’ capital adequacy. This will enable insurers to continue providing sustainable long-term insurance solutions to policyholders.
 
   The revised RBC framework will create a more conducive environment for insurers to invest in equities and long-dated bonds and offer long-term insurance products for policyholders, said MAS. Policyholders will benefit from better product pricing and asset allocation decisions made by insurers.
 
   The deadline for feedback on the latest consultation paper is 20 October.
 
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