On 20 July 2015, the revised Notice 211 (the “Notice”) issued by the Monetary Authority of Singapore (“MAS”) came into effect. The Notice applies to all direct general insurers (except marine mutual insurers and financial guarantee insurers) and contains mandatory and non-mandatory requirements.
The notable revisions to the Notice deal mainly with two areas:
- Extending the mandatory training and competency requirements to persons who provide advice relating to claims made or to be made under insurance policies; and
- The mandatory requirements which insurance agents have to comply with.
In this Update, we look into the key aspects of these revisions, and what they mean for general insurers in Singapore.
Persons Who Provide Claims Advice
One of the main revisions touches on the training and competency requirements for persons who “provide advice relating to claims made or to be made under an insurance policy”.
In the previous version of the Notice, save for certain exempted persons, the mandatory training and competency requirements only applied to insurance agents who are individuals, staff of direct general insurers and corporate insurance agents who sell or provide sales advice on general insurance products or handle claims.
In the amended Notice, the mandatory requirements now extend to cover insurance agents, staff of director general insurers and of service providers engaged by the direct general insurer who “provide advice relating to claims made or to be made under an insurance policy”. Save for certain exempted persons, insurers must thus ensure that such staff possess the necessary Certification in General Insurance (“CGI”) qualifications before they are allowed to provide advice relating to sales or claims. In the Circular No. ID 13/15 dated 6 July 2015 issued by the MAS, the MAS clarified that the revised Notice apply to outsourced claims handlers as well.
However, the Notice does not specify the classes of external agents which the Notice applies to or the nature of the advisory function caught under the same. Ostensibly, based on a literal reading of the requirements under the Notice, a wide range of external agents (for example, external legal counsels and staff in an insurer’s claims department) may be said to “provide advice relating to claims”. While it seems unlikely that the policy intent is for all persons engaged by insurers who provide any advice relating to general insurance claims to comply with the examination requirements, it remains for the MAS to clarify the scope of and thinking behind the amended Notice.
The other major revision to the Notice deals with the mandatory requirements for insurance agents.
First, the new Notice sets out a list of “fit and proper” requirements on age, residency, and minimum academic qualification for insurance agents. These requirements are the same as those in the General Insurance Agents Rules and Regulations, and thus do not set out any new or onerous obligations.
Secondly, an insurance agent must have the relevant CGI qualification, or else have acceptable qualifications in lieu. The revised acceptable qualifications are set out in the annexes to the Notice and are available on MAS’ website.
Insurers should be aware of the mandatory requirements for insurance agents, and ensure that all insurance agents (save for exempted persons) employed comply with these requirements. In particular, insurers should take note of the new list of acceptable qualifications in lieu of CGI qualification.
The new Notice 211 has already come into effect, putting in place minimum examination requirements on insurance agents and the staff of direct general insurers and of service providers engaged by the insurers. Insurers should take note of these requirements and ensure that their operations comply with the Notice.