Singapore passed the Insurance (Amendment) Act on 15 March 2013 to amend the Insurance Act (Chapter 142 of the 2002 Revised Edition) (“Amended Act”). The Amended Act makes some major changes to the regulatory framework with the primary aim of enhancing supervision of the insurance industry in Singapore. Highlights of the Amended Act are:
- The Monetary Authority of Singapore (“MAS”) may permit a foreign insurance regulator to inspect insurers operating in Singapore where such insurers are part of a larger group over which the foreign regulator has jurisdiction. In the future, MAS will provide information on a Singapore insurer to a regulator of the relevant insurer’s head office or parent company. Likewise, MAS has new powers to inspect the overseas branches and subsidiaries of Singapore-incorporated insurers.
- A pre-registration requirement on representative offices of foreign insurers, and MAS will exercise supervisory jurisdiction over such representative offices.
- No person may solicit insurance business in Singapore except a licensed insurer, an authorised reinsurer or a registered foreign insurer. Solicitation may also only be made in relation to the Singapore operations of an insurer (and solicitation for an overseas head office or branch is not permitted). Conversely, a Singapore insurer may not solicit insurance to be provided by an overseas branch.
- A new requirement for the prior consent of MAS before a licensed insurer may acquire an interest of 10% or more in another corporation.
- A new requirement for the prior consent of MAS before a person obtains effective control (including when acting in concert with others) or a substantial shareholding (5% of the voting rights) of a licensed insurer, with the aim of ensuring that only a fit and proper person may obtain such control or shareholding.
- Clarification that an insurance business transfer, even through novation, requires MAS’ prior consent (although the transfer of a small number of policies may not constitute a business transfer, and therefore not be covered).
- Mandatory appointment of certain key personnel and allows MAS to require the removal of an individual from such an office.
- Prohibition on the co-branding of insurance with an unregistered insurer.
- Changes to standardise the legal framework with other legislation administered by MAS, such as the Banking Act (Chapter 19 of the 2008 Edition) and the Securities Futures Act (Chapter 289 of the 2006 Edition), including the creation of an appeals procedure for rejected licence applications.