Monetary Authority of Singapore Annual Report 2010/2011
Our Work
ENSURING SAFETY AND SOUNDNESS OF FINANCIAL INSTITUTIONS AND FINANCIAL SYSTEM   27
Prudential Supervision and Surveillance   27
Fostering a Sound and Reputable Financial Centre   27
Property Market Measures   28
Review of Deposit Insurance Scheme in Singapore   28
Insurance Resolution and Policy Owners' Protection   28
Review of Insurance Act   29
Enhancing Safeguards for Retail Customers   29
Enhancing Regulatory Regime for Fund Management Companies   30
Achieving Fair Dealing Outcomes   30
Enhancing Corporate Governance Standards   31
Conclusion of First Two Civil Penalty Cases   31
Box 3: The Representative Notification Framework   32
Enhancing Market Conduct   33
Audit Assurance   33

Insurance Resolution and Policy Owners' Protection

MAS reviewed the life and general insurance Policy Owners' Protection (PPF) schemes which are provided for in the Insurance Act (IA) since 1986. Two separate consultation papers were issued in December 2005 and December 2009 respectively, which discussed policy proposals relating to the PPF schemes, including the membership, scope and level of PPF coverage, continuity of insurance coverage, and funding method. Recently, MAS consulted on the draft Deposit Insurance and Policy Owners' Protection Schemes (DI-PPF) Bill in December 2010. A 3rd consultation paper on the target fund size and levies as well as the subsidiary legislation necessary for the implementation of the PPF schemes was issued in May 2011. The legislative amendments came into effect on 1 May 2011.

In conjunction with the review of the PPF schemes, MAS amended the IA to enhance its powers relating to the resolution of insurers to strengthen MAS' ability to secure continuity in insurance coverage, particularly for life policies. Continuity of coverage is important as life policies tend to be long-term in nature, and early termination of the policies could cause a substantial loss to the policy owner due to a low surrender value or inability to take up new insurance cover due to advanced age or deteriorating health.