The proposed regulations, which were issued under the Short-term and Long-term Insurance Acts, govern the manner in which insurers outsource binder functions.
Binder functions refer to the authority granted to an underwriting manager or intermediary to enter into, vary or renew a policy on behalf of an insurer, or to settle claims on behalf of an insurer.
The proposed amendments seek to address emerging “undesirable” practices and regulatory gaps which had been identified.
The Treasury and the FSB said the proposed amendments would strengthen the existing regulations and enhance policy-holder protection.
Comments on the regulations should be submitted by September 1, it said.