Establishment of insurance funds and allocation of surplus
17.—(1)  Every registered insurer shall establish and maintain a separate insurance fund —
(a)for each class of insurance business carried on by the insurer that relates to Singapore policies; and
(b)for each class of insurance business carried on by the insurer that relates to offshore policies.
[11/86]
(1A)  Every direct insurer registered to carry on life business shall establish and maintain, in addition to the insurance funds under subsection (1) and subject to such conditions or restrictions as the Authority may impose, separate insurance funds —
(a)for its investment-linked policies; and
(b)for its non-investment-linked policies.
[23/2003 wef 01/01/2004]
(2)  If, in the case of a direct insurer registered to carry on life business, no part of the surplus of assets over liabilities from its non-participating policies is allocated by the insurer by way of bonus to its participating policies, the insurer shall, in addition to the funds maintained under subsections (1) and (1A) and subject to such conditions or restrictions as the Authority may impose, establish and maintain, in respect of its non-investment-linked policies, separate insurance funds —
(a)for its participating policies; and
(b)for its non-participating policies.
[23/2003 wef 01/01/2004]
(3)  The Authority may require any registered insurer to establish and maintain, in addition to the insurance funds under subsections (1), (1A) and (2), such other insurance fund as the Authority may determine for different types of policies in respect of each class of insurance business.
[11/86; 32/93]
(4)  There shall be paid into an insurance fund all receipts of the insurer properly attributable to the business to which the fund relates (including the income of the fund), and the assets comprised in the fund shall be applicable only to meet such part of the insurer’s liabilities and expenses as is properly so attributable but shall not be applied to meet any levy payable by the insurer under section 46.
[11/86]
(5)  In the case of an insurance fund which comprises wholly or partly of participating life policies, no part of the fund shall be allocated by way of bonus to those policies except with the approval of an actuary and only out of a surplus of assets over liabilities as shown on the last statutory valuation of the fund; and on the making of any such allocation that surplus shall be treated for the purposes of this section as reduced by the amount allocated.
[32/93]
(6)  Subject to subsection (7), if, on the last statutory valuation in the case of an insurance fund which comprises wholly or partly of participating life policies, there was shown a surplus (as reduced under subsection (5)) of assets over liabilities of the fund, there may, subject to the approval of an actuary and to any provision to the contrary in any instrument or contract binding the insurer, be allocated to the shareholders or withdrawn from the fund an amount not exceeding the surplus, and, on the making of any such allocation, that surplus shall be treated for the purposes of this section as reduced by the amount allocated.
[32/93]
(7)  No part of the surplus shall be allocated under subsection (6) in any year in excess of 10% of the sum of —
(a)the amount allocated in accordance with subsection (6); and
(b)the amount allocated thereout by way of bonus to participating life policies in accordance with subsection (5) within that year.
[32/93]
(8)  If, on the last statutory valuation in the case of an insurance fund established wholly in respect of non-participating life policies, there was shown a surplus of assets over liabilities of the fund, there may, subject to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the surplus, and, on the making of any such withdrawal, that surplus shall, for the purposes of this section, be treated as reduced by the amount withdrawn.
[32/93]
(9)  If, in the last statutory balance-sheet in the case of an insurance fund established in respect of general business, there was shown a surplus of assets over liabilities of the fund, there may, subject to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the excess of the surplus over any fund margin of solvency prescribed for that fund under section 18, and, on the making of any such withdrawal, that surplus shall, for the purposes of this section, be treated as reduced by the amount withdrawn.
[11/86]
(10)  In respect of any policy belonging to the insurer’s life business which is, under section 16(4), removed from the insurer’s register of Singapore policies, there may be withdrawn from an insurance fund to which the policy relates an amount not exceeding the prescribed amount.
[11/86]
(11)  Any amount withdrawn from an insurance fund under subsection (6), (8), (9) or (10)and, in a winding up, any part of an insurance fund remaining after meeting the liabilities and expenses to which the fund is applicable may be dealt with as if it had not formed part of the fund except that, in the case of a winding up where any other insurance fund of the insurer under this Act is in deficit, the surplus remaining after the winding up shall first be applied to make good the deficit in that fund.
[11/86; 32/93]
(12)  In a winding up, assets comprised in the deposit made by an insurer under section 14 in respect of either class of insurance business may be allocated by the Authority to any insurance fund established by the insurer for that class of business in such manner and proportion as the Authority sees fit, and assets so allocated shall be treated as assets of that insurance fund, and subsections (4) and (11) shall apply to those assets accordingly.
[11/86]
(13)  Any insurance fund established by an insurer for any class of insurance business shall, notwithstanding that the insurer at any time ceases to carry on that class of business in Singapore, continue to be maintained by the insurer so long as the insurer is required by this Act to maintain a register of policies for policies belonging to that class.
[11/86]
(14)  Any insurer carrying on insurance business in Singapore on or before 1st January 1987 which is required under subsection (1) to establish an insurance fund for offshore policies shall do so at the time of establishment of the insurer’s register of offshore policies, and by reference to the policies registered or required to be registered in it as at its establishment, and by reference to the assets and liabilities of the insurer as at that time; and —
(a)there shall be allocated to the fund assets of a value of not less (after allowing for any charges to which the fund is not applicable) than the aggregate of the amounts specified in subsection (15); and
(b)all such matters as would subsequently have affected the fund if established at that time shall be brought into account accordingly.
[11/86]
(15)  The amounts referred to in subsection (14)(a) are as follows:
(a)the amount, determined in the prescribed manner, of the liability of the insurer in respect of the policies referred to in subsection (14);
(b)the amount of any other liabilities of the insurer in so far as the assets allocated to the fund will be applicable or be treated as having been applicable to meet those liabilities; and
(c)the amount of the fund margin of solvency, if any, required to be maintained for the fund under section 18.
[11/86]
(16)  The assets of any insurance fund established by an insurer under this Act shall be kept separate from all other assets of the insurer.
[11/86]