Singapore

Principal Legislation

• Insurance Act of 1967 (as amended)
• Motor Vehicles (Third Party Risks and Compensation) Act (Chapter 189) of 1960
• Work Injury Compensation Act (Chapter 354) of 2008
• Insurance (Valuation and Capital) (Amendment) Regulations 2012
• Deposit Insurance and Policy Owners’ Protection Schemes (Policy Owners’ Protection Scheme) (Amendment) Regulations 2012

Supervision

The Monetary Authority of Singapore (MAS), which is the central bank, administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general. It is responsible for the supervision and regulation of insurance and reinsurance companies, including captives, and insurance and reinsurance brokers, but not insurance agents.

The local non-life insurance association is the General Insurance Association (GIA) while the life market is represented by the Life Insurance Association of Singapore (LIA).

There are a number of other associations in the market including the Singapore Brokers’ Association, Singapore Reinsurers’ Association and the Reinsurance Broker’s Association (Singapore).

Admitted / Non-admitted

There is nothing in the law prohibiting non-admitted business in Singapore for all classes except those obligatory by law, which must be placed in the local market with an authorised insurer. All of the latter are non-life classes.

Compulsory Classes

• Motor third party bodily injury.
• Aviation liability.
• Workers’ compensation.
• Professional indemnity for individual lawyers and legal firms, architects and accountants, some fund managers, financial advisers and insurance brokers.
• Third party liability cover for certain pleasure craft and vessels operating in the port of Singapore.
• Insurance against oil pollution from ships.
• Liability insurance for airports.
• Private health insurance cover is mandatory for all employees with a work permit or S Pass. For policies implemented or renewed from 1 January 2010 minimum coverage for foreign workers in Singapore increased from SGD 5,000 to SGD 15,000 per year.

State Involvement

There is no state owned insurance company.

Tariff Classes

There are no statutory tariffs affecting the life or non-life markets in Singapore.

Premium Taxes and Charges

Goods and service taxes of 7% is changed on non-life policies apart from travel and MAT insurance. Life insurance premiums are exempt from policy taxes and charges, including the GST.

Policy Language

Policies must be issued in English.

The government continues to promote the development of Singapore as a reinsurance centre and to encourage insurers to retain as much business as possible in the country. A concessionary 10% rate of corporation tax applies to Offshore Insurance Fund business. Singapore remains a proportional reinsurance market and shows little to no movement towards non-proportional reinsurance arrangements.

There are 29 registered professional reinsurers with a physical presence in the market, comprising 17 general reinsurers, three life reinsurers and nine composites. In addition, there are six reinsurers that do not have a physical presence in the market but that are authorised to write business in the market, including three general, one composite and two life reinsurers. There are two domestic reinsurers.

Brokers and agents are the main channels of distribution, although companies are employing more diverse means of delivery such as direct marketing, the internet and bancassurance. The life market is dominated by agents.

Singapore experiences mild tremors from time to time but is not in a seismically active zone. Singapore is not exposed to severe windstorms and the risk is regarded as remote, but the country does experience occasional squalls. Significant new protection in the form of the Marina Bay Barrage became operational and there have been no significant losses for at least more than 15 years.