Singapore legislation

Regulation 5

of Insurance (Financial Guarantee Insurance) Regulations

Regulation 5

Single and aggregate risk limits

Amended byS 360/99 wef 01/09/1999

Subregulation 1

Amended byS 360/99 wef 01/09/1999

A financial guarantee insurer shall limit its net exposure under any single financial guarantee insurance policy issued by the insurer in Singapore as follows:

(a)

for asset-backed obligations — the net exposure to each of the supporting assets shall not exceed 10% of the financial guarantee insurer’s qualified capital;

(b)

for infrastructure obligations that are issued in respect of projects or facilities built, owned or operated (whether at the time of construction or afterwards) by or on behalf of a government unit and for government obligations — the net exposure to the average annual debt service on the obligation shall not exceed 15% of the financial guarantee insurer’s qualified capital, and the net exposure to the principal amount of the obligations shall not exceed 100% of the financial guarantee insurer’s qualified capital;

(c)

for infrastructure obligations that are issued in respect of projects or facilities built, not owned or operated by a government unit — the net exposure to the average annual debt service on the obligations shall not exceed 10% of the financial guarantee insurer’s qualified capital, and the net exposure to the principal amount of the obligations shall not exceed 75% of the financial guarantee insurer’s qualified capital;

(d)

for real estate obligations that do not otherwise constitute asset-backed obligations — the net exposure to the principal amount of the obligations less 50% of the appraised value of the underlying real estate shall not exceed 10% of the financial guarantee insurer’s qualified capital; and

(e)

for corporate and other obligations — the net exposure to the principal amount shall not exceed —

(i)

25% of the financial guarantee insurer’s qualified capital for secured obligations; and

(ii)

15% of the financial guarantee insurer’s qualified capital for unsecured obligations.

Subregulation 2

A financial guarantee insurer shall maintain at all times qualified capital which in the aggregate shall be not less than the sum of —

(a)

1% or 1/100th of the aggregate net exposure to asset-backed obligations;

(b)

1.3333% or 1/75th of the aggregate net exposure to infrastructure obligations, government obligations, and real estate obligations that do not otherwise constitute asset-backed obligations;

(c)

2% or 1/50th of the aggregate net exposure to other obligations which are secured; and

(d)

4% or 1/25th of the aggregate net exposure to other obligations which are unsecured.

Read in full context — Insurance (Financial Guarantee Insurance) Regulations →