Singapore: RBC2 Review: Third Consultation

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By Alex Bryant, Richard W. Holloway, Wen Yee Lee | 14 September 2016

On 15 July 2016, the Monetary Authority of Singapore (MAS) issued its third consultation paper on proposed changes to the Risk-Based Capital (RBC) framework for insurers in Singapore, commonly dubbed “RBC2”. This was followed by further details on the matching adjustment and illiquidity premium allowances that were released by MAS a month later on 15 August 2016. As part of this consultation process, MAS has asked insurers to conduct a second quantitative impact study (QIS2) using updated technical specifications issued alongside the consultation paper. Companies need to provide their response to QIS2 by 20 October 2016.

In this e-Alert, we highlight and discuss some of the features of the proposed RBC2 framework and specifications that have changed in this latest consultation from those used for the previous quantitative impact study (QIS1), which was performed as part of the second consultation, issued in March 2014.