Singapore: MAS defines direct insurance products under FAIR

The Monetary Authority of Singapore (MAS) released an announcement on 30 July 2014 that sets out guidelines for the direct distribution of zero-commission life insurance in Singapore. This development is one of the key initiatives under the Financial Advisory Industry Review (FAIR), which is aimed at lowering the cost, and improving efficiency, of life insurance distribution.

From the start of 2015, all insurance companies catering to the retail market will be required to offer ‘direct purchase products’, defined by the MAS as life insurance products that consumers can ‘purchase directly from insurance companies, without incurring commissions’. This announcement is an important step towards expanding and developing the direct channel in Singapore and may prove the catalyst for regulators in other markets to follow suit.