The financial sector regulatory framework was fundamentally transformed in 2018 through the implementation of the twin peaks model of regulation. The Financial Sector Regulation Act (FSR Act), which came into force on 1 April 2018, repealed the Financial Services Board Act, resulting in the disestablishment of the Financial Services Board (FSB) and the creation of the Prudential Authority (PA) and Financial Sector Conduct Authority (FSCA).
Of all the financial sectors, the most significant and far-reaching changes in 2018 were made to the insurance sector, which was predominantly regulated by the FSB under the auspices of the Short-term Insurance Act (STIA) and Long-term Insurance Act (LTIA). Significant changes to LTIA, STIA and the related regulations and policyholder protection rules were promulgated. Insurers and reinsurers should carefully consider and align their contractual and operational arrangements with intermediaries, binder holders and outsource providers to ensure compliance with both the amended LTIA and STIA frameworks and the relevant Prudential Standards under the Insurance Act.
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