The Risk-Based Capital Framework and Risk-Based Supervisory approach give room for institutions to innovate and take more risks as long as adequate controls and risk management practices are in place. BIS Review 103/2006  1  Liberalisation of the general insurance industry MAS will also continue to encourage greater participation from a wide range of global insurance players in our market. In 2000, we lifted the moratorium on admission of new direct general insurers and removed the 49% limit on foreign shareholding in locally-owned direct insurers. Since then, the industry landscape has evolved considerably. Today, we have a diverse network of 58 direct insurers, many of whom are specialist insurers, 27 professional reinsurers and 60 captives. Most of the top international insurance and reinsurance brokers are also here. We continue to see interest from more players seeking to establish a presence here. We will consider all applicants that are well-capitalised, have an acceptable rating, and are managed by experienced professionals with a good track record even if the company is newly established. Singapore as an insurance hub Singapore has achieved a critical mass of insurance players and activities, becoming an insurance hub. This critical mass means a wide range of insurance products and services are available. Singapore is a logical choice for those seeking to purchase insurance because they know that there are capacity and expertise here. Indeed, Singapore serves as an important regional reinsurance centre as well as the largest captive domicile in Asia. Asia holds many opportunities for insurance.

While there are few ILS deals sponsored by Asian insurers, we expect to see more interest as insurers become increasingly sophisticated and focused on efficient management of risk and capital. MAS is developing a regulatory framework for ILS and will consult the industry in due course. Development of more advanced risk management techniques has to be supported by more sophisticated research. For example, more reliable estimates of catastrophic losses will allow insurers to better price and write larger risks. For ILS to be priced and rated, more robust risk models are needed. Singapore is well-placed to serve as a centre for Asian insurance research. We therefore encourage the industry to deepen its ties and collaboration with academia, and identify the relevant areas where greater research can make a difference. MAS is prepared to consider supporting worthy projects financially. Conclusion Ladies and gentleman, the success of our initiatives to grow the insurance industry is contingent upon active participation from the industry. As new products are introduced and more players enter the market, there will be greater vibrancy in our insurance industry. There will be greater cross-fertilisation of ideas and upgrading of skills, which will underpin the continued growth of Singapore into a thriving insurance marketplace. MAS and GIA have enjoyed an excellent working relationship over the years, and we look forward to many years of close and fruitful cooperation. It is our collective aim to continue to grow the vibrant insurance industry in Singapore and to bring it to even greater heights. Thank you.