Consultation paper on review on risk-based capital framework of insurers in Singapore ("RBC 2 review"): June 2012

The RBC framework for insurance companies was first introduced in Singapore in 2004. It adopts a risk-focused approach to assessing capital adequacy and seeks to reflect the relevant risks that insurance companies face. The minimum capital prescribed under the framework serves as a buffer to absorb losses. The RBC framework also provides clearer information on the financial strength of insurers and facilitates early and effective intervention by MAS, if necessary.

Whilst the RBC framework has served us well, MAS is embarking on a review ("RBC 2") of the framework in light of evolving market practices and global regulatory developments. The review will take into account the revised Insurance Core Principles and Standards issued by the International Association of Insurance Supervisors last year.

This paper reviews capital requirements, components of available capital and sets out two solvency intervention levels.