PolicyPal Network ICO complies with all rules, says founder

Singapore

POLICYPAL Singapore, the first to graduate from the Monetary Authority of Singapore (MAS) fintech regulatory sandbox, has denied an allegation of illegal fundraising on the part of affiliate PolicyPal Network (PPN).

The founder of both companies, Val Yap, told The Business Times that she wanted to clarify the statements that had appeared online regarding the recent initial coin offering (ICO) by PolicyPal Network.

Last month a posting by a Martina Johnson claimed that the ICO conducted by PolicyPal Network which raised US$20 million within 38 seconds was in breach of the Securities and Futures Act. The same posting was also sent to the MAS.

The posting also criticised the two startups for highlighting that PolicyPal Singapore (PPS) was the first graduate of MAS fintech sandbox as that implied that the ICO had been sanctioned by MAS.

PPS was in the sandbox for six months before graduating in August 2017. MAS launched the sandbox to facilitate experimentation with innovative fintech solutions where actual products or services are provided to customers with appropriate safeguards.

A MAS spokeswoman said it "has been notified of the matter and is looking into it."

PPS is a registered direct insurance broker regulated under MAS' Insurance Act and is an exempt financial adviser operating under the MAS' Financial Advisers Act, said Ms Yap.

PPS also works with a number of global insurance companies such as Aviva, AXA, Income, Etiqa, Manulife, Sompo, Liberty, Ergo, MSIG and Chubb.

PPS enables individuals to buy, manage and optimise their insurance policies via a free mobile application and so far it has accumulated a user base of over 40,000 in Singapore, Ms Yap noted.

Its affiliate PPN is a technology platform and acts as the token issuer of the recent ICO, said Ms Yap.

Both are known as insurtechs. Insurtech describes the new technology that is disrupting the insurance space.

Ms Yap said that the ICO was conducted in consultation with its legal advisers, Dentons Rodyk & Davidson LLP, and complies with all the laws and regulations in Singapore.

Dentons Rodyk's ICO team as led by senior partner Kenneth Oh had advised PPN on Singapore laws, including SFA compliance, confirmed a spokeswoman from the law firm.

"We have also obtained guidance from the digital token sales guidelines stipulated by MAS," Ms Yap added. "The ICO does not fall within the ambit of the Securities and Futures Act (SFA)."

"PPN is not an insurance broker and therefore is not regulated under the Insurance Act nor the Financial Advisers Act," Ms Yap said.

PPN is therefore not required to be regulated by MAS, she clarified.

PPN seeks to increase access to insurance protection and reduce barriers to entry for insurance protection.

"We aim to achieve this through peer-to-peer (P2P) mutual aid insurance implemented on the blockchain," Ms Yap said.

P2P mutual aid insurance is based on the concept of mutual aid or a cooperative, she noted.

The P2P mutual aid insurance to be offered on the PPN will be underwritten by one of the insurance companies we are currently working with, said Ms Yap.

"It is important to note that currently PPN does not underwrite, originate, nor issue insurance policies and or insurance contracts," she pointed out.