Welcome to the 19th edition of the Asia Pacific Insurance Newsletter.
This edition covers insights, pertinent insurance-specific legal issues and significant regulatory developments in Australia, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, Taiwan, Thailand, Vietnam.
We would also like to introduce Ko Wen Chia who has recently joined Baker McKenzie Wong & Leow as a Senior Consultant (Compliance). Ko Wen has 20 years of experience in the insurance industry covering both life and general insurance, in local and regional capacities. He is also a Fellow of the International Compliance Association (ICA).
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If you missed earlier editions of this newsletter, access our newsletter archive, insurance guides and other legal alerts at the Asia Pacific Insurance page.
In this issue:
- Arising from the Royal Commission into the financial and insurance industry, a number of reforms are in the process of implementation in Australia. These include extending the Unfair Contract terms legislation to insurance contracts. This legislation was passed on 6 February 2020 and will commence on 5 April 2021.
- In view of the coronavirus outbreak, the Insurance Authority (IA) announced on 21 February 2020 a set of temporary facilitative measures to reduce the risk of infection from face-to-face meetings between intermediaries and their clients.
- The Insurance (Amendment) Bill 2020 provides for a bespoke, streamlined regulatory framework for the issuance of insurance-linked securities (ILS) through the formation of special purpose insurers (SPIs).
- By 17 October this year, each insurance company that operates as a sharia business must submit an action plan to the Indonesian Financial Services Authority on their plan to spin off their respective sharia business into separate entities.
- OJK Has Publicly Issued Relevant Suggestions and Policies During the COVID-19 Outbreak in Indonesia. Based on several news reports that we have collected, the OJK has issued the following suggestions and policies that are relevant to insurance companies.
- On March 13, 2020, the Financial Services Agency (FSA) requested insurance companies to take following actions in order to protect policyholders suffering from COVID-19.
- The Central Bank of Malaysia (BNM) has provided guidance on the obligations on Malaysian insurers to cushion the impact of disruptions caused by the outbreak of COVID-19 on individuals and businesses.
- On 16 March 2020, the Philippine Insurance Commission issued Circular Letter No. 2020-12, which set the guidelines for the conduct of business with the commission as a response to the declaration by Philippine President Rodrigo Duterte mandating the enhanced community quarantine in the Philippines due to the Coronavirus-19 situation.
- Following the Ministry of Health (MOH) raising of the Disease Outbreak Response System Condition (DORSCON) Alert Level from Yellow to Orange on 7 February 2020 and in view of the heightened risk of importation of COVID-19 cases into Singapore the Monetary Authority of Singapore (MAS) has issued several advisories to financial institutions (FIs) in Singapore, as part of the national effort to reduce the risk of further local transmission of COVID-19.
- Insurers, their directors, senior management and appointed actuaries should note the significant changes proposed by the Monetary Authority of Singapore (MAS) to the MAS Notice 320 on the management of participating life insurance business (Notice 320).
- The Financial Supervisory Commission (FSC) now opens the door for insurance companies to invest in the Islamic fixed income securities, a.k.a. Sukuk bonds.
- The FSC made an amendment to the regulations regarding prior-approval procedure for novel insurance products in hopes that the insurers would speed up their resubmissions.
- With the spread of Covid-19, the OIC seeks to ensure that Thai residents are well-protected from risks relating to the virus. So far, the OIC has established the OIC Response Center - COVID-19, which will publish the agency's urgent policies and measures.
- The OIC launched RBC Phase 2 on 31 December 2019.
- The OIC first introduced the insurance regulatory sandbox in May 2017. After three years of trial, the OIC has recently updated the components of the sandbox to better suit Thailand’s insurtech ecosystem.
- The State Bank of Vietnam recently issued Circular No. 37 providing guidelines on bancassurance distribution transactions, particularly insurance agency operations by credit institutions and foreign bank branches for insurance enterprises.