On 13 October 2014, the Monetary Authority of Singapore (the “MAS”) issued a Consultation Paper on the review of insurance returns. The first set of insurance returns was introduced in the Insurance (Accounts and Statements) Regulations 2004 (the “Regulations”), which have since undergone six rounds of minor amendments.
The MAS is embarking on a complete review of the insurance returns to enhance information requirements for its supervisory needs and provide further clarification for completion of the returns. The consultation exercise closed on 24 November 2014.
Broadly, the MAS proposed revisions to the information requirements in the returns as well as the presentation format. The MAS is also proposing revisions to reporting requirements for specialist insurers.
Set out below are some of the proposals outlined in the Consultation Paper. The proposed submission requirements, revised insurance forms and instructions for completion of these forms are set out in the appendices to the Consultation Paper.
Revisions to information requirements
Regarding the revisions to the information requirements, the MAS proposes removing the reporting requirements of Form 10 “Statement of financial position in respect of global business operations” and Form 13(c) “Lapses breakdown by sum insured” found in the First Schedule to the Regulations.
New reporting requirements will also be introduced, e.g. the provision of information on financial instruments other than equity securities, debt securities, cash and deposits, and loans. The MAS explained that the new reporting requirements will enhance understanding of insurers’ asset and liability profiles, financial performance of different business segments, exposure to related parties, and exposure to insurance risks.
The Consultation Paper includes details of other proposals, e.g. a proposed requirement for policy liabilities gross of reinsurance to be reported separately from reinsurers’ share of policy liabilities and the classification of contingency reserves and exchange translation reserves as equity instead of liabilities.
Implementation and transitional arrangements
The MAS will move the reporting requirements for both mainstream and specialist insurers from existing regulations to new notices.
The MAS proposes that insurers submit quarterly and annual returns based on the format and requirements of the revised insurance returns for periods beginning on or after 1 January 2016. For mainstream insurers, the first quarterly submission of the revised returns will be for the quarter ending 31 March 2016 and the first annual submission of the revised returns will be for the accounting period ending 31 December 2016.
To facilitate the comparison of information in the annual returns for the accounting period ending 31 December 2016 with that for the accounting period ending 31 December 2015 (the “2015 Annual Returns”) on the same basis, the MAS proposes to also collect the 2015 Annual Returns based on the format and requirements of the revised insurance returns in the fourth quarter of 2016. Insurers will still be required to submit the 2015 Annual Returns based on the format and requirements of the existing insurance returns.