implemented this framework in january 2015 with a one year transition period for the industry to be familiar with the framework before the requirements are legislated in january 2016. 13. while many financial advisors do their work professionally, it is also a reality that compensation system can shape sales behaviours, and sales - based remuneration models may not always align the interests of financial advisers with the consumers. 14. under the bsc framework, a major proportion of a representative ’ s remuneration will be based on whether the representative has acted professionally such as consumer needs analyses, recommendation of suitable products, and adequate disclosures. this bsc initiative will help to align the interests of financial advisers with their customers. over the longer term, the bsc framework will boost consumer confidence in the professionalism of the financial advisory industry. strengthening the resilience of the life insurance industry : rbc2 15. let me now turn to the new risk - based capital framework or rbc2. why the move from rbc to rbc2? 16. insurance regulators around the world are adopting risk - based capital and singapore has been a frontrunner with our current insurance risk - based capital ( rbc ) framework introduced in 2004. this risk framework has served us well, and our insurers have navigated largely unscathed through recent financial crises ; while the framework allowed for regulatory bis central bankers ’ speeches intervention in a timely and effective manner. now, i know this begs the question – if it isn ’ t broken, why fix it? 17. the answer is that the operating environment for global finance including insurance, has and will become increasingly complex given the more connected global markets, the vulnerability of contagion, an overall low interest rate environment that pushes investors including insurers to target more risky higher - yielding products and potential new risk areas such as in some emerging markets or in technology risks. 18. it is important that our insurance capital framework remains relevant and effective and that insurers operating in singapore are well - capitalised to weather different crises and risk forms. 19. at the global level, the international association of insurance supervisors ( iais ) has also embarked on the development of capital standards for internationally active insurance groups ( “ iaigs ” ) ; while the international accounting standards board is expected to finalise its guidance on insurance contracts under ifrs4 sometime this year. progress on rbc2 20. last year, mas published our second consultation paper, which outlined our key proposals for rbc

the new capital framework to be more risk - sensitive and robust, but it should also be fit - for - purpose and not hamper well managed insurance businesses unduly. at individual firm level, the new framework does not seek to make it bis central bankers ’ speeches better or worse for you compared to the current rbc, but only that how much capital that you will hold in future be more sensitive to your risk profile. 28. the mas will embark on another stage of consultation and we are also targeting an additional qis in q2 2015. we will of course work closely with the lia in this regard. conclusion 29. let me conclude with a broad note on talent development for the insurance industry. 30. over the years, mas has been working closely with many of you on various manpower development initiatives. the insurance talent development framework jointly developed with the industry in particular, focuses on expanding the talent pipeline for leadership positions. last year, mas successfully rolled out the non - life track under the insurance management associate programme and is now working closely with the singapore college of insurance to launch the life track this year. 31. i strongly encourage all of you to continue with your investment in talent development. this should go beyond technical competencies but to include issues of ethics and conduct. 32. to end off, i am sure some of you may have seen the internet discussion around the chinese new year on whether this is the year of the sheep, the goat or the ram. i think many of us have settled for the goat. as one of my colleagues noted, goats are resilient and intelligent creatures ; able to maintain their balance in the most precarious of places but yet, possess a calm and unexcited exterior with a beard that conveys a certain wisdom. so may i wish everyone all these fine qualities of the goat. bis central bankers ’ speeches