MAS ISSUES CONSULTATION PAPER ON REGULATION

The Monetary Authority of Singapore has issued a consultation paper that sets out the proposed regulatory framework for the city-state’s mortgage insurance business. Under the proposals, mortgage insurers will be required to operate as monoline insurers. A contingency reserve requirement will be installed that will be sufficient to cover peak losses during any downturns in the economic and property cycles. Mortgage insurers will not be allowed to deal directly with borrowers. Where any mortgage insurance deal is in place, the lender is required to tell the borrower before the arrangement commences that such a deal has been put in place, the name of the insurer, and the borrower’s rights and responsibilities under the contract. The deadline for responses to the consultation paper is November 15.