SINGAPORE: nbsp; In an initial list released on Thursday( Sep 21 ) by the Monetary Authority of Singapore( MAS ), Aia Singapore, Income Insurance, Prudential Assurance, and Great Eastern Life have all been named domestic systemically important insurers. & nbsp;
According to a press release from MAS, insurers whose failures are thought to significantly affect Singapore’s financial system and overall economy will be officially referred to as domestic systemically important insurance companies. & nbsp;
Additionally, they will be subject to regulatory measures that are essentially the same as those put in place by domestically significant banks like DBS, OCBC, and UOB. & nbsp;
Higher cash requirements for carriers are one of these actions. Its higher and lower regulatory treatment levels, as well as its Tier 1 and Tier 2 capital requirements, will be increased by a 25 % capital add-on. & nbsp;
The highest quality cash is Common Equity Tier 1 investment, which also includes surplus from insurance money, retained earnings, and paid-up money. According to MAS, Tier 1 cash consists of both frequent equity and other Tier 1, capital instruments.
According to MAS, the add-on replaces the 25 % higher impact fee that the four carriers must pay under the current system. & nbsp;
Another factor is planning for recovery and quality. & nbsp;
Treatment planning may improve an insurer’s capacity to rebuild its financial viability and strength during a difficult time, according to MAS. & nbsp;
In order to minimize impact on the financial structure and business, resolution planning may improve MAS ‘ ability to ensure the proper and ordered restructuring or exit of an insurance company if it fails. “”
According to MAS, the four businesses are expected to continue providing suitable buffers to meet the new framework’s capital requirements. It also said that it is working with them to plan their treatment.
The nbsp model; On January 1 of the following year, private centrally significant insurers will go into effect. It & nbsp; ” Facilitates the annual impact evaluation of carriers based on their length, interconnectedness, substitutability, and complexity” by formalizing and updating an existing model. & nbsp;
Enhancing the ( domestic systemically important insurers ) framework is part of MAS ‘ ongoing efforts to strengthen the resilience of Singapore’s financial sector, according to Ho Hern Shin, deputy managing director of financial supervision.
It guarantees that local centrally significant insurers are more closely supervised and subject to stricter regulations. “”