Friday, July 27, 2012

A Safety Net for your General Insurance Policies – The Policy Owners’ Protection Scheme


Singapore consumers enjoy the benefits of a sound financial system. Insurers licensed in Singapore are supervised by the Monetary Authority of Singapore (MAS). It is MAS’ aim to ensure the stability of the financial system in Singapore and to require financial institutions to have sound risk management systems and adequate internal controls.

However, MAS does not guarantee the soundness of individual financial institutions. Therefore, a Policy Owners’ Protection Scheme (PPF Scheme) has been set up to protect policy owners in the event of failure of a life or general insurer which is a PPF Scheme member.


In a previous entry,

What happens if an insurance company goes bankrupt in Singapore?

It focused on more of life insurance and life insurance companies.
In this entry, we will be taking a closer look at general insurance or non-life insurance.

The Policy Owners’ Protection (PPF) Scheme is an additional safety net that protects the interests of General Insurance policy holders in the event a general insurer fails.

The PPF Scheme provides 100% coverage for the types of general insurance policies covered under the Scheme. No caps are applicable for protection of your general insurance policies.

All general insurance companies
are regulated entities in Singapore. The PPF Scheme provides added assurance so that there is a compensation scheme for policy owners to reduce the financial impact on individuals in the event an insurer defaults. Experience in other countries has shown that consumers are less likely to panic if and when things go wrong, if there is a mechanism in place to guarantee the safety of insurance policies.

All insurers registered by MAS that carry out direct general business (other than captive insurers or specialist insurers) are member of the Policy Owners’ Protection Scheme (PPF Scheme members).

The PPF Scheme is administered by the Singapore Deposit Insurance Corporation (SDIC). For more information and the list of the PPF Scheme members is posted on SDIC’s website at www.sdic.org.sg

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