MAS unveils inaugural list of domestic systemically important insurers in Singapore

The Monetary Authority of Singapore (MAS) today (21 September) published its framework for designating domestic systemically important insurers (D-SIIs), and the inaugural list of four D-SIIs.

These are AIA Singapore Private Limited, Income Insurance Limited, Prudential Assurance Company Singapore (Pte) Limited and The Great Eastern Life Assurance Company Limited.

The D-SII framework will come into effect on 1 January 2024. It formalises and updates an existing framework, and will facilitate the annual impact assessment of insurers based on their size, interconnectedness, substitutability and complexity.

Ho Hern Shin, deputy managing director (Financial Supervision), MAS, said: "Enhancing the D-SII framework is part of MAS' continuous efforts to strengthen the resilience of Singapore's financial sector. It ensures that domestic systemically important insurers are subject to higher regulatory standards and closer supervision."

Insurers whose failures are assessed to have a significant impact on the financial system and broader economy in Singapore will be formally designated as D-SIIs and subject to additional supervisory measures. These measures largely mirror those applicable to domestic systemically important banks (D-SIBs) [3]  and include:

Higher capital requirements - A 25% capital add-on will apply, increasing a D-SII's higher and lower supervisory intervention levels, as well as Common Equity Tier 1 (CET1) and Tier 1 capital requirements [4] . This add-on replaces the 25% high impact surcharge applicable to the four D-SIIs under the existing framework.

Recovery and resolution preparedness - Recovery planning will bolster an insurer's ability to restore its financial strength and viability in a period of distress. Resolution planning will enhance MAS' ability to ensure the timely and orderly restructuring or exit of an insurer if it fails, so as to minimise impact to the financial system and economy.

Given their current capital positions, the four D-SIIs are expected to continue meeting the capital requirements under the D-SII framework with adequate buffers. MAS further said it has also been engaging the four D-SIIs on recovery planning.