SINGAPORE - The Monetary Authority of
Singapore (MAS) is proposing to extend its Corporate Governance (CG) Framework
to all direct insurers and reinsurers incorporated in Singapore.
This is to ensure effective corporate
governance, given insurers' responsibilities to safeguard policyholders'
interests and the important role they play in the financial system and economy,
MAS said.
Currently, the CG Regulations are applicable
to only the significant insurers, which encompasses any direct life insurer
which is incorporated in Singapore and has total assets of at least $5 billion
in its Singapore Insurance Fund and Offshore Insurance Fund.
The CG Guidelines apply just to direct
insurers incorporated in Singapore.
Key recommendations in the proposal are:
>> To categorise locally-incorporated
direct insurers and reinsurers into two tiers based on the size of total assets
or annual gross premiums;
>> To subject Tier 1 insurers to higher
CG standards. The Regulations that are currently applicable to significant insurers
will be applied to Tier 1 insurers;
>> To require Tier 2 insurers to have a
board comprising at least one third of directors who are independent directors;
>> To extend the CG Guidelines to all
locally-incorporated reinsurers; and
>> To introduce a disqualification rule
for the directors, executive officers and employees of an insurer. The insurer
will be required to obtain MAS' written consent to employ persons disqualified
under the rule.
The proposed recommendations requiring
insurers to appoint new independent directors to the board are targeted to take
effect no later than from the first Annual General Meeting (AGM) of each
insurer, held on or after Jan 1, 2015.
This is to take into consideration that
affected insurers may need more time to find suitable independent directors,
MAS said.
For the other recommendations, they are to
take effect no later than from the first AGM of each insurer, held on or after
Jan 1, 2013.
The proposed disqualification rule is targeted
to take effect in mid 2013.
More details are available in the consultation
paper that can be accessed on the MAS website.
MAS invites interested parties to forward
their comments on the proposals in the consultation paper by March 23, 2012.
AsiaOne
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