On Sep. 29, SIN MAS issued proposal re resolution in insurance sector.
SIN MAS issued Consultation paper on new notice for recovery and resolution planning for insurers and proposed enhancement of resolution powers for the insurance sector, regarding proposed new notice for recovery and resolution planning for insurers.
In addition, re proposed enhancement of resolution powers for the insurance sector.
SIN MAS also published a circular regarding the same, and seeks feedback on consult.
SIN MAS enhanced resolution regime in Oct. 2018, by acquiring powers to bolster resolution toolkit, i.e. powers in the areas of recovery and resolution planning (RRP).
As well as temporary stays on early termination rights on financial contracts; statutory bail-in powers for the banking sector, cross-border recognition of resolution actions.
SIN MAS is now consulting on the proposals to extend the statutory bail-in tool to the insurance sector, as well as on temporary stays on reinsurers’ termination rights.
SIN MAS said robust and credit RRP allows a distressed financial institution to restore its financial strength, be restructured, or to exit from the market in an orderly manner.
It proposed requirements in new RRP notice re the preparation and review of recovery planning, establishment of a robust framework to test the feasibility and effectiveness of its recovery plan (RCP), as well as maintenance of management information systems that are able to produce information required for RRP in a timely manner.
RRP requirements in the notice will apply to insurers notified by SIN MAS (notified insurers); SIN MAS expects all insurers to have RCP in place to identify actions that can be taken to restore its financial position, viability under situations of severe stress.
SIN MAS said it will focus on domestic systematically important insurers (DSIIs) for now given their systemic impact; the notified insurers will be the DSIIs for now.
SIN MAS said the draft notice is set out in annex 1 to SIN MAS's consultation paper.
Next Steps
Paper includes implementation timeline; SIN MAS plans to issue Notice on recovery and resolution planning for insurers Jan. 1, 2024, and for it to take effect Jan. 1, 2025.
Consultation End
The comment period for this consultation closes on Oct. 31, 2023.
Dec. 2023 SIN MAS Response and Notice
On Dec. 29, 2023, SIN MAS wrote to inform it published document Notice for recovery and resolution planning for insurers, which is its response to the consultation above.
In addition, published MAS notice 134 - recovery and resolution planning for insurers.
Notice takes effect Jan. 1, 2025; MAS's response relates to various aspects of proposal i.e. said further guidance on information to be maintained in management information systems will be set out in separate guidelines which MAS will subsequently consult on.
Response also includes clarifications re outsourcing arrangements supporting critical functions and critical shared services; clarifications re board, management oversight.
In addition, at this time, MAS said it only intends for the domestic systematically important insurers (DSIIs) to be notified insurers given their systemic impact.
Mar. 2024 Risk Assessment Framework
On Mar. 22, 2024, SIN MAS wrote on the inclusion of domestic systemically important insurers framework in impact and risk assessment of financial institutions framework.
It confirmed MAS’ framework for impact and risk assessment of financial institutions (monograph) has been updated to include the D-SII framework and under appendix 2.
Sep. 2024 Response to Consultation
On Sep. 12, 2024, SIN MAS published responses to the feedback it received on the consultation on the new Notice for recovery and resolution planning for insurers and consultation on Enhancement of resolution powers for the insurance sector.
SIN MAS also explained that it is now consulting on proposed amendments to the Financial services and markets (resolution of financial institutions) regulations 2024.
They will extend the statutory bail-in regime to the insurance sector and prescribe the maximum duration of temporary stays on the early termination rights of reinsurers.
In Sep. 2024, SIN MAS proposed extending statutory bail-in to insurers, #226006.
In Sep. 2024, SIN MAS consulted on new guidelines to MAS Notice 134, see #227644.
Regulators
SIN MAS
Entity Types
IB; Ins; SIFI
Reference
Cir ID 11/24, 9/12/2024; Cir ID 06/24, PR 3/22/2024; Cir ID 20/23, Nt 134, Rsp P010-2023, 12/29/2023; PR, Cir ID 11/23, CP P010-2023, 9/29/2023; ESG
