Learning

After studying this chapter, you should be able to:

• understand the structure of the Singapore general insurance and reinsurance markets
• know who are the buyers, intermediaries and sellers in the general insurance and reinsurance markets
• know what is Direct Purchase Insurance (DPI)
• understand which are the major insurance trade associations and other relevant bodies in the Singapore insurance industry, including their main roles and objectives
• understand the role of rating agencies
• understand the role of the Monetary Authority of Singapore (MAS) in insurance regulation
• list the classification of instruments issued by MAS and understand their differences
• know the two options available to policyholders under the nomination of beneficiaries for Personal Accident Insurance and Health Insurance policies
• describe the purpose of the Policy Owners’ Protection Scheme relating to general insurance policies
• understand the Premium Payment Framework jointly issued by the General Insurance Association of Singapore (GIA) and Singapore Insurance Brokers’ Association (SIBA)
• recognise the key differences between an insurance agent and a general insurance broker

1. INTRODUCTION

1.1 Like any other market, the insurance market comprises:

▪ buyers;

▪ sellers; and

▪ intermediaries (or middlemen).

1.2 Buyers are those who need insurance, e.g. the general public, government and commercial enterprises. In fact, the direct insurers and captive insurers themselves are buyers, when they seek reinsurance from the reinsurers.

1.3 Sellers comprise the insurance companies and reinsurance companies.

1.4 Intermediaries refer to insurance agents and brokers, including reinsurance brokers. Under Section 1A of the Insurance Act (Cap. 142), “insurance intermediary” “means a person who, as an agent for one or more insurers or as an agent for insureds or intending insureds, arranges contracts of insurance in Singapore, and includes an insurance agent or an insurance broker.”