This update was first published in the April 2012 China edition of Accounting and Business magazine.
The Monetary Authority of Singapore (MAS) issued a consultation paper in February 2012 proposing an extension of the MAS Corporate Governance (CG) Framework to all direct insurers and reinsurers incorporated in Singapore. This is in line with MAS’s emphasis on the importance of effective corporate governance.
Key recommendations are:
- To categorise locally incorporated direct insurers and reinsurers into two tiers based on the size of total assets or annual gross premiums.
- To subject tier 1 insurers to higher CG standards. The regulations currently applicable to significant insurers will be applied to tier 1 insurers.
- To require tier 2 insurers to have a board comprising at least one-third of directors who are independent.
- To extend CG guidelines to all locally incorporated reinsurers.
- To introduce a disqualification rule for an insurer’s directors, executive officers and employees. The insurer will be required to obtain MAS’s written consent to employ persons disqualified under the rule.
The recommendations on the appointment of new independent directors are targeted to take effect no later than from the first annual general meeting (AGM) held on or after 1 January 2015. The other recommendations are targeted to take effect no later than from the first AGM held on or after 1 January 2013. The proposed disqualification rule is targeted to take effect in mid 2013.
Joseph Alfred, policy and technical adviser, ACCA Singapore