ID 08/25 Issuance of Consultation Paper and Quantitative Impact Study on Proposed General Insurance Catastrophe Risk Requirement
Executive Summary
The Monetary Authority of Singapore (MAS) issued a consultation paper on 24 July 2025 proposing a new **General Insurance Catastrophe Risk Requirement (GI Cat risk charge)** under the enhanced Risk-Based Capital 2 (RBC 2) framework to capture extreme events not covered by existing premium and claim liability risks. This matters for general insurers as it introduces standardized scenarios for Singapore Insurance Fund (SIF) and Offshore Insurance Fund (OIF), plus bespoke scenarios, potentially increasing capital requirements and necessitating model governance and quantitative impact studies (QIS). Compliance professionals must engage promptly as the consultation closed on 5 September 2025, with implementation likely following RBC 2 enhancements. #
What Changed
- Introduction of GI Cat risk charge: Captures natural (e.g., standardized flood for SIF; whole-of-portfolio for OIF) and man-made catastrophe risks (e.g., fire/explosion, economic events, pandemic) not adequately addressed in current premium/claim liability risks, integrated into RBC 2. - SIF computation: Prescribed standardized scenarios (flood for natural; fire/explosion, economic event, pandemic for man-made) plus annual "Own Bespoke" scenario for material risks like earthquakes or cyberattacks. - OIF computation: Standardized man-made scenarios plus annual "Own Bespoke" for man-made risks; natural cat on whole-of-portfolio basis using vendor/in-house models with governance requirements; simplified 25% capital add-on if below materiality threshold. - Aggregation approach: Specified met
What You Need To Do
- Complete and submit QIS for SIF and OIF general business (exemptions apply for certain reinsurers' OIF)
- Provide feedback on consultation questions, including standardized scenarios, "Own Bespoke" requirements, OIF materiality threshold, flood parameters, and governance for models
- Review and prepare internal catastrophe models (vendor/proprietary) meeting proposed governance standards for OIF natural cat risks
- Assess capital impacts under proposed charges and aggregation; update RBC 2 compliance programs accordingly
- Monitor MAS website for final rules post-5 September 2025 (https://www
Key Dates
Compliance Impact
Urgency: High - As of February 2026, consultation is closed, signaling imminent finalization and integration into RBC 2 (last revised Notice 133 on 8 December 2025), requiring proactive capital modeling, scenario testing, and governance updates to avoid supervisory scrutiny. Failure to prepare could elevate capital costs, disrupt RBC compliance, and expose firms to RBC 2 enforcement risks amid MAS
Who is Affected
Summary
Informs insurers of the issuance of the Consultation Paper and Quantitative Impact Study on the Proposed General Insurance Catastrophe Risk Requirement