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RIMS/RIMAS Singapore conference examines RM issues on the Asian and global scenes.

"Asia-Pacific Strategies for the '90s," the conference hosted by RIMS and the Risk and Insurance Management Society of Singapore (RIMAS) Oct. 28-31 in Singapore, brought together about 250 people to discuss a variety of risk management and insurance-related issues. Twenty-three countries were represented, with approximatley two-thirds of the attendees coming from the Pacific region and the rest from North America and Europe.

Michael Wan, RIMAS president, conference co-chair and financial controller of The Gertz Corp. in Singapore, offered his perspective on risk management trends in the AsiaPacific region. He noted that companies there have been slow to accept risk management practices due to its business culture, which has deep-rooted beliefs in the forces of nature, and the controlled, static insurance market.

The 1980s saw much progress, particularly in loss control awareness, he said. And today risk management associations exist in India, the Philippines and Singapore. RIMS officials met with representatives from companies in Malaysia to help them create their own association. The Malaysian government is privatizing major industries, including telecommunications and transportation, which is spurring interest in risk assessment and control and insurance.

Education Is Vital

Mr. Wan said education is "absolutely vital for risk management to become a separate management discipline. ... Senior management and other staff should be made aware that not only will the firm suffer losses if assets are lost or damaged, but unforeseen accidents will cause the whole nation to suffer." He cited such examples as the reduced supply of North Sea oil following the Piper Alpha rig fire and the environmental destruction in Alaska resulting from the Exxon Valdez oil spill.

In his welcoming remarks, Singapore Insurance Commissioner Law Song Keng encouraged companies to form captives in his country, which is home to 44 captives, mostly from Australia. In a session on Asia-domiciled captives, Lim Shu Chiau, deputy director in the insurance commissioner's Department of the Monetary Authority, stressed the island's strategic location, political stability and business infrastructure, including support services such as banking, auditing and fund management.

Recognizing that "captive insurers are essentially 'self-insurance' vehicles has led us to adopt a regulatory framework conducive to captive insurance operations," she said, noting that Singapore's insurance act requires captives to have minimum paid up capital of S$1 million, compared to S$5 million for commercial insurers. Captives are also exempt from the S$500,000 statutory deposit requirement.

There also "exists a concessionary tax rate of 10 percent for income derived from offshore insurance business as well as on foreign-sourced interest and dividends derived from the investment of shareholders' funds supporting the offshore business," said Ms. Lim.

RIMS President Cheri Hawkins, assistant treasurer and director of insurance for Weyerhaeuser Co. in Tacoma, WA, challenged the insurance industry to better respond to business needs. "There is a growing trend for insurance companies to exclude or limit coverage on almost any risk that might lead to a claim," she said, adding, "A claim is the mother of an exclusion."

Risk managers, she said, "need coverage against political risk. We need coverage against sudden and accidental pollution. We need to cover hazardous waste disposal."

Alluding to the growing ties among risk managers through the developing network of the International Federation of Risk and Insurance Management Associations (IFRIMA), she noted, "As we grow closer and better understand local mechanisms, we risk managers will be able to work together with brokers, insurers and governments to create uniform rules and regulations worldwide. We'll be able to draft policy language that makes sense, that follows form, that ensures the integrity of the insurance product. Or we may look to pooling, to global captives and various risk-sharing mechanisms."

Other Events

Other seminars focused on product liability, business interruption claims, loss prevention programs, mergers, acquisitions and joint ventures, export risks, political risks and environmental issues.

The conference concluded on a playful note as Andrew Marr, managing director of the Trim Division of Frank B. Hall in Sydney, Australia, presented Risk Management Chess. Using a series of video vignettes, each of which set up a crisis situation risk managers could find themselves ill, the game challenged the audience to decide what to do.

At the outset of the conference, eight IFRIMA member associations held a semiannual board of directors meeting. An education liaison committee was formed and a mandate developed to assist in fostering risk management education.
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No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related information on political and environmental risks; Risk and Insurance Management Society, Risk and Insurance Management Society of Singapore
Author:Epstein, Rita
Publication:Risk Management
Date:Jan 1, 1991
Words:722
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