Newsletter
DERIVATIVES TRANSACTIONS BY THE INSURANCE INDUSTRY
The Ministry of Finance (MOF) currently adheres to a case-by-case approval system for insurers seeking to handle derivative financial products. It also requires insurers engaging in derivatives transactions to do so by means of non-discretionary trust fund rather than through direct trading.
To aid in risk management, the Department of Insurance of the MOF has stated its intention to draw up supervisory standards including internal controls to govern derivatives transactions by the insurance industry. Meanwhile, though, it will refrain from opening up direct derivatives trading by the insurance industry until such time as all the relevant conditions and regulations are in place.