THIRD SCHEDULE
Sections 2(1), 54(8), 90(1) and Fourth Schedule
Protected liabilities
1.  For the purposes of computing the levies payable by PPF Scheme members under section 38, the aggregate amount of the protected liabilities of a PPF Scheme member in respect of its insured policies covered under the PPF Life Fund is the aggregate of all the following amounts:
(a)in the case of Category 1 insured policies, an amount equivalent to the product of the protection ratio referred to in paragraph 2(a) of the Fourth Schedule and the guaranteed policy liabilities for each of such policies;
(b)in the case of Category 2 insured policies, an amount calculated in accordance with the following formula:
 
whereA
is the protection ratio for sum assured referred to in paragraph 2(b) of the Fourth Schedule;
 
B
is the protection ratio for surrender value referred to in paragraph 2(c) of the Fourth Schedule; and
 
C
is the guaranteed policy liabilities for each of such Category 2 insured policies;
(c)in the case of Category 3 insured policies, an amount equivalent to the product of the protection ratio referred to in paragraph 2(d) of the Fourth Schedule and the guaranteed policy liabilities for each of such policies;
(d)in the case of Category 4 insured policies —
(i)where the insured policies are group term policies, group endowment policies or group whole life policies, an amount calculated in accordance with the following formula:
 
whereD
is the protection ratio for sum assured referred to in paragraph 2(e)(i) of the Fourth Schedule;
 
E
is the protection ratio for surrender value referred to in paragraph 2(e)(ii) of the Fourth Schedule; and
 
F
is the guaranteed policy liabilities for each of such group term policies, group endowment policies or group whole life policies; and
(ii)where the insured policies are group annuity policies, an amount equivalent to the product of the protection ratio for commuted value referred to in paragraph 2(e)(iii) of the Fourth Schedule and the guaranteed policy liabilities for each of such policies.
2.  For the purposes of computing the compensation to be paid out to an insured policy owner from the PPF General Fund under section 48A, the aggregate amount of the protected liabilities in respect of the insured policy owner’s insured policy issued by a failed PPF Scheme member is calculated in the following manner:
(a)in the case of a compulsory insurance policy, the full amount of any liability of the failed PPF Scheme member under the insured policy, in respect of a sum payable to any person entitled to the benefit under the terms of any compulsory insurance policy, which arises from a liability of the policy owner that is subject to compulsory insurance, including the full amount of any such liability which becomes payable before, or within 30 days after, the quantification date;
(b)in all other cases, the full amount of any liability of the failed PPF Scheme member to the insured policy owner under the terms of the insured policy, including the full amount of any such liability which becomes payable before, or within 30 days after, the quantification date.
3.  For the purposes of determining the amount of benefits that an insured policy owner is entitled to receive from the PPF General Fund in the event of a claim under the insured policy owner’s insured policy, which occurs after the transfer or during the run‑off of the insurance business of the failed PPF Scheme member under section 54, the protected liabilities in respect of the insured policy owner’s insured policy are —
(a)in the case of a compulsory insurance policy, the full amount of any liability of the failed PPF Scheme member under the insured policy for a sum payable to any person entitled to the benefit under the terms of the compulsory insurance policy for a liability of the policy owner that is subject to compulsory insurance, including the full amount of any such liability of the failed PPF Scheme member which becomes payable before, or within 30 days after, the quantification date; and
(b)in all other cases, the full amount of any liability of the failed PPF Scheme member to the insured policy owner under the terms of the insured policy, including the full amount of any such liability of the failed PPF Scheme member which becomes payable before, or within 30 days after, the quantification date.
4.  For the purposes of determining the amount of benefits that an insured policy owner is entitled to receive from the PPF General Fund in the event of termination of an insured policy issued by the failed PPF Scheme member under section 54, the protected liabilities in respect of the insured policy are —
(a)in the case of a compulsory insurance policy, the full amount of any liability of the failed PPF Scheme member under the insured policy before the termination, in respect of a sum payable to any person entitled to the benefit under the terms of the compulsory insurance policy for a liability of the policy owner that is subject to compulsory insurance before the termination of the policy; and
(b)in all other cases, the full amount of any liability of the failed PPF Scheme member to the insured policy owner under the terms of the insured policy applicable before the termination.
5.  For the purposes of determining the amount of benefits that an insured policy owner is entitled to receive from the PPF Life Fund in the event of a claim under the insured policy owner’s insured policy, which occurs after the transfer or during the run-off of the insurance business of the failed PPF Scheme member under section 54, the protected liabilities in respect of the insured policy owner’s insured policy are computed in the following manner:
(a)in the case of a Category 1 insured policy, the product of the protection ratio referred to in paragraph 2(a) of the Fourth Schedule and the guaranteed policy liabilities for the policy;
(b)in the case of a Category 2 insured policy, an amount calculated in accordance with the following formula:
 
whereA
is the protection ratio for the sum assured mentioned in paragraph 2(b) of the Fourth Schedule;
 
B
is the protection ratio for the surrender value mentioned in paragraph 2(c) of the Fourth Schedule; and
 
C
is the guaranteed policy liabilities for each of such Category 2 insured policies;
(c)in the case of a Category 3 insured policy, the product of the protection ratio referred to in paragraph 2(d) of the Fourth Schedule and the guaranteed policy liabilities for the policy;
(d)in the case of a Category 4 insured policy —
(i)where the policy is a group term policy, group endowment policy or group whole life policy, the policy liabilities valued in accordance with regulations prescribed pursuant to section 17 of the Insurance Act 1966 for the valuation of assets and liabilities in an insurance fund using —
(A)the adjusted sum assured which is the product of the protection ratio for sum assured referred to in paragraph 2(e)(i) of the Fourth Schedule and the sum assured guaranteed under the policy; and
(B)the adjusted surrender value which is the product of the protection ratio for surrender value referred to in paragraph 2(e)(ii) of the Fourth Schedule and the surrender value guaranteed under the policy; and
(ii)where the policy is a group annuity policy, the product of the protection ratio for commuted value referred to in paragraph 2(e)(iii) of the Fourth Schedule and the guaranteed policy liabilities for the policy.
6.  For the purposes of determining the amount of benefits that an insured policy owner is entitled to receive from the PPF Life Fund in the event of termination of insured policies issued by the failed PPF Scheme member under section 54, the protected liabilities in respect of the insured policy owner’s insured policy are —
(a)in the case of a Category 1 insured policy, the product of the protection ratio mentioned in paragraph 2(a) of the Fourth Schedule and the guaranteed policy liabilities for the policy applicable before the termination;
(b)in the case of a Category 2 insured policy, the policy liabilities valued in accordance with regulations prescribed under section 17 of the Insurance Act 1966 for the valuation of assets and liabilities in an insurance fund before the termination of the policy using —
(i)the adjusted guaranteed sum assured, which is the product of the protection ratio for the sum assured mentioned in paragraph 2(b) of the Fourth Schedule and the sum assured guaranteed under the policy applicable before the termination; and
(ii)the adjusted surrender value, which is the product of —
(A)the protection ratio for the surrender value mentioned in paragraph 2(c) of the Fourth Schedule; and
(B)the surrender value guaranteed under the policy applicable before the termination, or if there is no such surrender value, the commuted value of the amount of guaranteed benefit payments under the policy if it had been in force at the time of the commuting;
(c)in the case of a Category 3 insured policy, the product of the protection ratio mentioned in paragraph 2(d) of the Fourth Schedule and the guaranteed policy liabilities for the policy applicable before the termination; and
(d)in the case of a Category 4 insured policy —
(i)where the policy is a group term policy, group endowment policy or group whole life policy, the policy liabilities valued in accordance with regulations prescribed under section 17 of the Insurance Act 1966 for the valuation of assets and liabilities in an insurance fund before the termination of the policy using —
(A)the adjusted sum assured, which is the product of the protection ratio for the sum assured mentioned in paragraph 2(e)(i) of the Fourth Schedule and the sum assured guaranteed under the policy applicable before the termination; and
(B)the adjusted surrender value, which is the product of the protection ratio for the surrender value mentioned in paragraph 2(e)(ii) of the Fourth Schedule and the surrender value guaranteed under the policy applicable before the termination, or if not available, the commuted value of the amount of guaranteed benefit payments under the policy if it had been in force at the time of the commuting; and
(ii)where the policy is a group annuity policy, the product of the protection ratio for the commuted value mentioned in paragraph 2(e)(iii) of the Fourth Schedule and the guaranteed policy liabilities for the policy applicable before the termination.
[31/2018]
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