'Understanding how regulators are working together is important for all businesses'

Asia is home to various insurance regulatory regimes, ranging from tariff-rated jurisdictions to relatively free markets. For any business, whether it is an insurance company, broker, captive insurance company or corporate entity, the regulatory environment in which it operates can be a driver for, or constraint on, business growth.

The interconnectivity of risk is reaching unprecedented levels, not only for insurers and insureds, but also for regulators. This will change forever the risk management environment for us all. Understanding how regulators are working together is important for all businesses.

The recent development that bodes well for regulator co-operation was a Monetary Authority of Singapore (MAS) representative office opening in Beijing.

According to MAS: “The Beijing representative office will further strengthen bilateral collaboration between the MAS and the People’s Bank of China, as well as with other Chinese financial authorities including the China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission.”

Compliance and sustainability

The key consideration for insurers and corporate entities is to ensure that their Chinese operations are covered in a compliant and sustainable way.

It is also crucial to understand the regulatory environment that exists for insurers in Singapore. Regulator the Monetary Authority of Singapore (MAS) is particularly active and this can bring benefits, but also pose risks for business.

As such, companies need a structured framework in which they can operate, so they are comfortable dealing with varied and complex regulatory issues.

In general, active regulators, such as those in Singapore, should be seen as positive entities. Their aim is to encourage and facilitate insurance buying’

In general, however, active regulators – such as those that operate in Singapore – should be seen as positive entities. Their aim is to encourage and facilitate insurance buying by creating access to varied and quality products, while also encouraging the growth and development of insurers, reinsurers and captives.

One of the key benefits of the Singapore market, in terms of admitted and non-admitted insurance, is the country’s attractive regulatory environment for continuing insurance activity – for both large corporate entities and insurers.

Corporate disclosure issues

One area that seems to be lagging behind in Asia – including to some degree in Singapore – is the degree of disclosure around corporate risk management.

With no clear regulation or stock exchange requirements relating to corporate risk management disclosure, there is a clear opportunity to improve risk management’s standing – not only within individual businesses, but also in the wider community, including investors.

In future, listed companies could be required to report on their risk management activities, as the FTSE asks UK-listed companies to do.