SINGAPORE Law and Practice Contributed by: Simon Goh and Wang Ying Shuang, Rajah & Tann Singapore LLP
strengthen the resilience of vulnerable communities in the region has become more urgent. In May 2018, the ASEAN+3 Finance Ministers endorsed SEADRIF, in what was conceived as a risk pooling arrangement. SEADRIF is supported by the World Bank in partner- ship with Japan, and was established in 2019 in Sin- gapore. As a first project, SEADRIF issued a flood risk insurance programme involving Laos and Myanmar in January 2021, which provides ex-ante climate and disaster risk and insurance financing solutions for these two countries. The aim is for such disaster risk insurance to reduce disruptions to national budgets and to provide immediate liquidity financing so that countries affected by a natural disaster can receive help promptly, with less reliance on humanitarian assistance, which can be uncertain and take time. Longevity Arrangement Many Asian markets are witnessing a rapidly ageing society. Longer lives, fluctuating interest rates and the increased need to plan for one’s retirement are lead- ing consumers to seek better financial security in their golden years. The insurance sector is well placed to help empower customers to achieve better financial wellbeing by providing relevant savings and retirement solutions. In 2022, Swiss Re partnered with Income Insurance on the first collateralised longevity reinsurance arrange- ment of its kind in Singapore, which helps de-risk Income Insurance’s legacy annuity book. This part- nership will help shield Income Insurance from future variations in its annuity book, by sharing with Swiss Re any future payments to annuitants who live beyond their age expectancy. 11.2 New Products or Alternative Solutions See 11.1 Emerging Risks Affecting the Insurance Market . 12. Developments in Insurance Law 12.1 Significant Legislative or Regulatory Developments As mentioned in 6.1 Obligations of the Insured and Insurer , the insurance law reform sub-committee formed by Singapore Academy of Law’s Law Reform
Committee published its report on reforming insur- ance law in Singapore on 28 February 2020. The report reviewed areas of Singapore’s insurance laws that might be potentially outdated and assessed whether reform was needed to the duty of utmost good faith, the duty of disclosure and misrepresentation, warran- ties, remedies for fraudulent claims, insurable inter- est, late payment of claims and select aspects of an intermediary’s role. Apart from changes to the duty of utmost good faith and the duty of disclosure, signifi- cant changes to other areas of insurance contract law (for example, on insurable interest) in Singapore can be expected. The proposed reforms will likely focus on rebalancing the rights between insureds and insurers to ensure that insureds’ rights are appropriately pro- tected, whilst ensuring that insurers can continue to appropriately consider, manage and price risk. In October 2024, the MAS issued a consultation paper on a proposed revision to the capital treatment for structured products and infrastructure investments for insurers. The MAS currently adopts a risk-based approach in assessing the financial and capital ade- quacy of insurers. Recognising that structured prod- ucts encompass a range of financial instruments of diverse natures and varying risk profiles, the MAS proposes implementing a differentiated risk-charg- ing approach based on different product types. In addition, given that infrastructure assets are gener- ally known for their long-term nature and stable cash flows, the MAS proposes adopting a risk-appropriate and evidence-based capital treatment for infrastruc- ture investments entered into by insurers. The consul- tation closed in November 2024, and the MAS issued its response to the consultation in October 2025. In December 2023, the MAS revised the guidelines relating to outsourcing arrangements and renamed them “Guidelines on Outsourcing (Financial Institu- tions other than Banks)” (“Outsourcing Guidelines”). The Outsourcing Guidelines took effect on 11 Decem- ber 2024 and set out the MAS’ expectations of a financial institution (including insurers and reinsurers) that has entered into any outsourcing arrangement or is planning to outsource its business activities to a service provider. The Outsourcing Guidelines were amended to include a list of exempted outsourced services (ie, those that are wholly provided by the
415 CHAMBERS.COM
Powered by FlippingBook