1. ASIA PACIFIC FINANCIAL FORUM
An Overview of APFF Work Related to Retirement, Health and Long-term investments
Makoto Okubo, Nippon Life Insurance Company
Sherpa, APFF Insurance and Retirement Income Work Stream Auckland, 2 February 2018

2. 2017 APEC Joint Finance Ministerial Statement
2017 APEC JOINT FINANCE MINISTERIAL STATEMENT was issued on 15 October 2016 in Hoi An.
It assesses the global and regional economy and describes joint actions to be implemented by APEC economies over the next year to achieve strong, sustainable, balanced and inclusive growth. Among them include measures to address long-term infrastructure investment, financial inclusion, base erosion and profit shifting, and disaster risk financing and insurance.
It includes the following paragraph:
We welcome ABAC and the APFF’s contribution to the implementation of the CAP, including the recommendations on financial market infrastructure and micro insurance. We encourage continued collaboration among interested relevant stakeholders in advancing these initiatives of the CAP.
We welcome the exploratory dialogues between senior finance officials, Life Science and Innovative Forum (LSIF) and Health Working Group (HWG) to address the fiscal and economic impacts of the steep rise in chronic disease and of ageing societies in APEC economies. We encourage further dialogue with interested economies to share best practices and explore innovative, sustainable health financing solutions

3. 2017 APEC Joint Finance Ministerial Statement (cont.)3
The joint statement also contains an annex on diversifying financing sources and fostering private sector involvement in infrastructure investment in APEC economies.
As for institutional investors and promoting infrastructure as an asset class, the annex includes the following:
There is a large potential to expand investment by public and private institutional investors – particularly multilateral and national development banks, pension funds, insurance companies, Sovereign Wealth Funds (SWFs) and mutual funds.
Governments may review financial regulations that may potentially pose unintentional barriers to infrastructure investment by institutional investors, taking into account prudential, investor protection, and overarching financial stability objectives.
In order to attract institutional investors to the full spectrum of infrastructure assets, such assets need to be structured as attractive investment opportunities, providing revenue streams and risk-return profiles that match investors’ return expectations and liability structures.

4. The APFF Structure Asia-Pacific Financial Forum (APFF)
APEC Finance Ministers Process (FMP)
APEC Business Advisory Council (ABAC)
Asia-Pacific
Financial Forum
(APFF)
APFF Work Streams
Financial Infrastructure Development Network
Trade / Supply Chain Finance
Capital Markets
Financial Market Infrastructure / Cross-Border Practices
Insurance / Retirement Income
Linkages / Structural Issues
Credit Information
Classic repo markets
Retirement /Health/ Long-Term Investment
Secured Transactions
Derivatives
Disaster Risk Financing /Insurance
Accounts Receivables Finance
Asia Region Funds Passport
Microinsurance
Disaster Risk Financing

5. APFF Insurance and Retirement Income WS [Sherpa Makoto Okubo]
CAP
4E Long - Term Investment
in Infrastructure
3B Disaster Risk Financing
and Insurance WG
Retirement, Health and Long-Term Investment Working Group
[Sherpa Makoto Okubo /
Vice Sherpa Paul F. Lynch]
Disaster risk financing and Insurance Working Group
[Sherpa Masaaki Nagamura]
Retirement and protection
[led by Vanessa Wang]
Disaster Risk Financing
[led by Masaaki Nagamura] SG
Infrastructure and Investment
[led by Brian Murray]
in collaboration with APFF CMWS and APIP
Regulation and Accounting
[led by Makoto Okubo]
Micro-Insurance
[led by Antonis Malagardis]
in collaboration with
Financial Inclusion Group
Innovative Health Financing Mechanism
[led by Ryan MacFarlane]
in collaboration with LSIF
Islamic Infrastructure Investment Platform (I3P)

6. 2017 APFF Progress Report to APEC Finance Ministers
APFF work on retirement and long-term investment
2017 APFF Progress Report to APEC Finance Ministers
Expanding the Region’s Long-Term Investor Base
Triple wins thru Retirement income and long-term investment
Consumers receive high and stable returns for long-term savings
The financial sector is able to access deeper capital markets for infrastructure investment.
Governments obtain relief from large contingent fiscal liabilities
Triple gaps to address to achieve the above objective
Pension/Protection Gap
Infrastructure/Investment Gap
Regulatory/Accounting Gap

7. Mandatory provisions and scalable retirements systems
Pension/Protection Gap
Mandatory provisions and scalable retirements systems
Tax incentives to promote long-term saving products
Product/distribution innovation and financial awareness

8. Pension/Protection - Progress
The APFF intends to coordinate with global initiatives (i.e. OECD, World Economic Forum) and the pension industry (i.e., Asia Pacific Investors Cooperation) and to hold dialogues with both pension and insurance regulators
APFF/APIC Regional Pension Funds and Social Security Systems Summit, 5-6 December 2017, Hong Kong
The APFF continues to study selected APEC economies and examine gaps and potential solutions on retirement income and longevity solutions. The following are some examples of the recent developments in the region
Thai Government introducing a new mandatory provident fund scheme
Malaysia’s Employees Provident Fund (EPF) receives innovation award for its retirement advisory service
Australian government’s consultation on the Discussion Paper
Life Annuity Scheme in Hong Kong

9. Pension/Protection - Work plan
End goals (draft as of 26 January 2018)
By 2022: Expand the pension fund investor base by promoting adoption by relevant policy makers of best practices in: (a) designing mandatory provisions for retirement savings, (b) design and implementation of tax incentives for long-term savings products; and (c) product and distribution innovation and financial awareness.
2018 deliverables (draft as of 26 January 2018)
Work with selected APEC economies’ Regulators on filling pension gap 　(both in accumulation and decumulation)
Case studies/follow-ups on Chile, Hong Kong, Thailand, Korea (TBC)
Toolbox to expand retirement savings and longevity solutions (i.e. mandatory provisions, tax incentives, government subsidies, longevity transfers, digital economy and 4th pillar)
Major 2018 actions (draft as of 26 January 2018)
3Q or 4Q 2018, Hong Kong (TBC): APFF Dialogue/roundtable on retirement income and protection [Host: TBD]
Other roundtables/workshop meetings throughout the year in collaboration with OECD, APIC, etc.

10. Promotion of infrastructure as a defined asset class
Infrastructure/investment Gap
Promotion of infrastructure as a defined asset class
increased fiscal spending by Asian sovereigns within macroeconomic parameters suitable for developing economies
adoption of various financing vehicles, with a broader public-private partnership framework to promote long-term infrastructure investment

11. Infrastructure/Investment - Progress
The APFF is coordinating with global (i.e. Global Infrastructure Hub, OECD, WEF) and ASEAN initiatives (i.e. AIC) and the securities industry (i.e. ASIFMA), and undertakes dialogues with selected APEC economies (i.e. Indonesia, Vietnam, Philippines, Thailand)
APFF/APIP Dialogue with Indonesian Government on PPPs in Waste Management on 14 March in Jakarta
APEC Finance Ministers Process Seminar on Long-Term Investment in PPP on 17 May in Ninh Binh
APFF Roundtable on Long-Term Investment on 25 July in Toronto
The APFF continues to study selected APEC economies and examine possible improvements to attract long-term investors, including financing vehicles, green finance, and survey on infrastructure investments:
Rethinking risk allocation in PPPs
The IFC/WBG’s PPPs in infrastructure

12. Infrastructure/Investment - Work plan
End goals (draft as of 26 January 2018)
By 2022: Promote expanded investment by insurance firms and pension funds in infrastructure through the development o innovative financing vehicles and regulatory changes to treat infrastructure as an asset class.
2018 deliverables (draft as of 26 January 2018)
Work with Singapore and Hong Kong Regulators on reform of solvency regulations. New regulations to include special treatment of debt and equity investment related to infrastructure
Toolbox to facilitate infrastructure investment (i.e. financial vehicles, government incentives, PPP initiatives)
Major 2018 actions (draft as of 26 January 2018)
3Q or 4Q 2018, Singapore and/or Hong Kong (TBC): APFF Dialogue/roundtable on infrastructure and investment to achieve agreement on definition of infrastructure drawing on existing EU, NAIC and World Bank definitions, and to identify specific areas where regulations can be amended to remove unnecessary barriers to investment (drawing on work of APIP). [Host: TBD]
Other roundtables/workshop meetings throughout the year in collaboration with APIP, SDIP, ASEAN, etc.

13. Bank-centric regulations Short-term oriented economic regime
Regulation/Accounting Gap
Bank-centric regulations
Short-term oriented economic regime
“One-size-fits-all” model
Remaining key accounting issues
Unit of account
Scope for “variable fee approach”
Transition

14. Regulation/Accounting - Progress
The APFF participates in global and regional conferences and meetings to discuss relevant regulatory and accounting issues.
The APFF has engaged in continuous outreach and dialogue with policymakers, regulatory authorities and accounting standard setters, international (i.e. IAIS, IASB, OECD, World Bank) and regional institutions (i.e. ADB, ASEAN, NAIC, ASSAL)
IAIS Work on risk-based global ICS and Dialogue with IAIS
IFRS17 and Dialogue with IASB
Dialogue with regulatory authorities in the region
Coordination with AIC, Geneva Association and IIF
The APFF continues to study selected APEC economies and examine regulatory and accounting issues and consider possible implementation support:
APFF Roundtable on Insurance Regulations and Accounting on 31 October in Hong Kong

15. Regulation/Accounting - Work plan
End goals (draft as of 26 January 2018)
By 2025: Adoption of solvency and accounting regimes that do not discourage insurers from making long-term investment in infrastructure and capital markets
2018 deliverables (draft as of 26 January 2018)
Work with Indonesia, Thai and Hong Kong Regulators (TBC) on IFRS17 (and IFRS9) to mitigate unintended consequences on long-term business
Achieve stakeholder consensus on incorporating growth in global regulatory discussions (i.e. discount rate)
Checklist on implementation of IFRS17 including potential impact on financial reporting and solvency assessment and recommended adjustments (if any)
Major 2018 actions (draft as of 26 January 2018)
3Q or 4Q 2018, Jakarta, Bangkok, and/or Hong Kong (TBC): APFF Dialogue/roundtable on insurance regulations and accounting to continue outreach and dialogue with policymakers, regulators, standard setters and international institutions [Host: TBD]
Other roundtables/workshop meetings throughout the year in collaboration with OECD, ADB, ASEAN, etc.

16. Innovative Health Financing Mechanism - Work plan
End goals (draft as of 26 January 2018)
By 2022: Establishment of structures and adoption of best practices in APEC members to harness the private sector in creating innovative and sustainable health financing mechanisms
2018 deliverables (draft as of 26 January 2018)
Initiate a pilot project in Thailand to establish and support a structure within the Thai Government that can lead efforts to develop innovative and sustainable health financing mechanisms.
Major 2018 actions (draft as of 26 January 2018)
2Q 2018, Bangkok: APFF Workshop on Innovative and Sustainable Health Financing Mechanisms [Host: Thai Ministry of Finance, ABAC Thailand]

17. 2017 seminars contributed by the APFF RLTIWG
17th OECD/ADBI Roundtable on Capital Market and Financial Reform, Tokyo, 2-3 March
3rd Indonesia Infrastructure Finance Conference, Jakarta, May
5th EIOPA/ICIR Conference on Global Insurance Supervision, Frankfurt, 6-7 September
OECD/NAIC/OIC Roundtable on Insurance and Retirement Savings in Asia, Bangkok, September
5th Insurance China International Summit, Shanghai, September
2017 International Longevity Risk and Capital Markets Solutions Conference, Taipei, September
OLIS 50th Anniversary Life Insurance Symposium, Tokyo, October
36th FIDES Conference, San Salvador, November
27th CNSF International Conference, Mexico City, 16 November
28th Pacific Insurance Conference, Hong Kong, November
20th ASEAN Insurance Regulators’ Meeting and 43rd ASEAN Insurance Council Meeting, Vientiane, November
4th NAIC Asia Pacific International Forum, Honolulu, 29 November – 1 December

18. Makoto Okubo (m-okubo@nipponlifeglobal.com)
Asia Pacific Financial Forum (APFF)
An Overview of APFF Work Related to Retirement and Long-term investments
For more details on the APFF, visit mackglobe.com or
Makoto Okubo 18