TYPES OF INSURANCE COMPANIES

 

Direct Insurers

These are insurance companies that exist primarily to provide insurance protection to insurance buyers in Singapore. All insurance companies operating in Singapore must be registered under the Insurance Act (Cap. 142), an Act that spells out the regulation of insurance business and insurance intermediaries in Singapore. The Monetary Authority of Singapore (MAS) Act (Cap. 186) gives MAS the authority to regulate all elements of monetary, banking and financial aspects of Singapore. A list of the financial institutions licensed by MAS can be found on the MAS website at http://www.mas.gov.sg/fi_directory/index.html

Direct life insurers are insurers that are registered to write life policies, as well as long and short-term accident and health policies.

Direct general insurers are insurers that are registered to write all insurance business other than insurance business concerned with life policies and/or long-term accident and health policies. Direct general insurers offer products that provide cover for fire, motor, work injury compensation, liability, personal lines, health and others. General insurers also include the specialist insurers, such as marine insurers that specialise in protection and indemnity, and other marine insurance policies (e.g. cargo and hull), as well as insurers specializing in credit and political risk insurance and financial guarantee insurance.

Insurers that are registered to conduct both life and general insurance businesses are known as composite insurers.

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Reinsurers

Reinsurers can be registered in Singapore to carry out life reinsurance and/or general reinsurance business in Singapore. They are not permitted to write direct business and are only allowed to assume all or part of the insurance or reinsurance risk written by another insurer.

Overseas reinsurers may apply for authorisation in respect of life and/or general reinsurance business. Once authorised, they are allowed to solicit business and collect premiums from insurers in Singapore.

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Captive Insurers

Captive insurers are registered to insure the risks of their parent and related companies as defined under Section 6 of the Companies Act (Cap. 50). Normally, they are subsidiaries of, or wholly-owned by large multinational companies, whereby the parent and related companies will first purchase insurance covers from their own captive insurers and transfer part of the risks to reinsurance companies.

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Lloyd's Asia Scheme

The Lloyd’s Asia Scheme is a foreign insurer scheme established under Part IIA of the Insurance Act (Cap. 142). This scheme replicates in Singapore the Lloyd’s of London insurance marketplace. Lloyd’s members can carry on insurance business in Singapore through the locally-incorporated service companies, which are registered with the Administrator of the Scheme. Lloyd’s of London (Asia) Pte Ltd is the approved Administrator of the Scheme.

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*We would like to thank the Singapore College of Insurance for their contribution on the above write up.