Insurance Act - Singapore Statutes Online

Deposits, registers of policies and insurance funds

14. [Repealed by Act 16/2011 wef 01/05/2011]

Deposits by authorised reinsurers

14A.—(1) Every authorised reinsurer shall maintain a reinsurance deposit of a value of such amount as may be prescribed in respect of each class of business for which it is authorised.

(2) A deposit under subsection (1) shall be made in such form and manner, and in assets of such nature, as may be prescribed.

(3) All income accruing in respect of a deposit under subsection (1) shall be payable to the insurer making the deposit.

(4) The Authority may, in relation to a deposit under subsection (1), prescribe —

(a)	the rights and obligations of any party in relation to the deposit; and
(b)	any other matter which the Authority considers to be incidental to or necessary for this section. [23/2003 wef 01/01/2004]

Bank covenants in lieu of deposits

15.—(1) If, in the case of any insurer, a bank licensed under any written law for the time being in force relating to banking makes with the Authority an agreement in a form approved by the Authority whereby —

(a)	the bank covenants to deposit with the Authority a specified sum in cash on account of the insurer’s deposit under section 14A in respect of either class of insurance business; and
(b)	the covenant complies with any requirement the Authority sees fit to impose as to the circumstances in which that sum is to be deposited,

then, for the purposes of this Act, the insurer shall be treated as having made the deposit under that section and the sum so covenanted for shall be recoverable notwithstanding that no consideration is furnished on the agreement.

[16/2011 wef 01/05/2011]

[11/86]

(2) Any sum deposited by a bank in pursuance of an agreement made under subsection (1) shall be dealt with under or for the purposes of this Act as if it were a sum deposited by the insurer under section 14A.

[16/2011 wef 01/05/2011]

16.—(1) Every registered insurer shall establish and keep —

(a)	a register of Singapore policies where it carries on business relating to Singapore policies; and
(b)	a register of offshore policies where it carries on business relating to offshore policies. [11/86]

(2) Subject to this section, there shall be entered in the register of Singapore policies all Singapore policies of the insurer and in the register of offshore policies all offshore policies of the insurer, and no policy entered in any register shall be removed from it so long as the insurer is under any liability in respect of that policy.

[11/86]

(3) Subject to this section, there may be entered in the register of Singapore policies such other policies as the insurer, with the consent (express or implied) of the policy owners, may determine, and this Act shall apply in relation to any policy so entered as if it were a Singapore policy.

[11/86]

(4) Subject to subsection (5), an insurer carrying on life business outside Singapore (and not doing so only by the collection or receipt of premiums) may, at the request of the policy owner of a policy belonging to the insurer’s life business —

(a)	refrain from entering the policy in the register of Singapore policies, notwithstanding that it is a Singapore policy; or
(b)	remove the policy from the register of Singapore policies,

and this Act shall thereafter apply in relation to the policy as if it were not a Singapore policy.

[11/86]

(5) Regulations may provide that subsection (3) or (4) shall apply only in such cases as may be prescribed or shall have effect subject to any prescribed exceptions or restrictions.

[11/86]

(6) A Singapore insurer shall, at the request of any person having an interest in any policy of the insurer, inform him whether or not the policy is entered in any register of policies established by the insurer under this Act.

[11/86]

(7) Where a Singapore insurer has established under this Act any register of policies, the register shall cease to exist as a statutory register under this Act of policies belonging to either class of insurance business, if the insurer ceases to be registered under this Act in respect of that class of business; and any reference in this Act to policies registered under this Act shall be construed accordingly.

[11/86]

(8) Subject to subsection (7), any register of policies established by a Singapore insurer shall, notwithstanding that the insurer at any time ceases to carry on in Singapore either class of insurance business, continue to be maintained by the insurer for policies belonging to that class so long as the insurer is under any liability in respect of those policies registered or required to be registered at that time;

[11/86]

(9) No policies referred to in subsection (8) belonging to either class of insurance business shall be entered in the register under subsection (3) when the insurer is not carrying on that class of business in Singapore, or is doing so only by the collection or receipt of premiums.

[11/86]

(10) A register of policies established and kept by an insurer under this section before 1st January 1987 shall be deemed to be a register of Singapore policies under subsection (1).

[11/86]

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.

[16/2011 wef 01/05/2011]

[11/86]

(5) For the purposes of subsection (4), the Authority may prescribe or specify in directions what constitutes receipts, income, liabilities or expenses of the insurer which are properly attributable to the business to which an insurance fund relates and the manner in which each item is to be determined or valued.

[23/2003 wef 23/08/2004]

(6) In the case of an insurance fund maintained by a direct insurer registered to carry on life business which comprises wholly or partly of participating policies —

(a)

there shall be a surplus account, established and maintained in such manner as may be prescribed, as part of the insurance fund;

(b)

no part of the fund shall be allocated by way of bonus to the participating policies except —

(i)	with the approval of the directors of the insurer, upon considering a written recommendation from the actuary appointed under section 31; and
(ii)	where the making of such allocation does not contravene any condition or restriction that may be prescribed or specified in directions for the purposes of this section;

(c)

no part of the fund shall be allocated to the surplus account except —

(i)	with the approval of the directors of the insurer, upon considering a written recommendation from the actuary appointed under section 31;
(ii)	where the making of such allocation does not contravene the fund solvency requirement under section 18;
(iii)	where the making of such allocation does not contravene any condition or restriction that may be prescribed or specified in directions for the purposes of this section; and
(iv)	where the amount does not exceed ¹/₉th of the amount allocated pursuant to paragraph (b) for a particular accounting period. [23/2003 wef 23/08/2004]

(7) Notwithstanding subsection (6)(c), an insurer may make additional allocations to the surplus account of an insurance fund which comprises wholly or partly of participating policies of an amount and in a manner as prescribed or specified in directions by the Authority.

[23/2003 wef 23/08/2004]

(8) Where the amount allocated to the surplus account in a particular accounting period pursuant to subsection (6)(c) is less than ¹/₉th of the amount allocated pursuant to subsection (6)(b) for that accounting period, the insurer shall not allocate the difference between the amount actually allocated and the ¹/₉th amount allowed to the surplus account in any subsequent accounting period.

[23/2003 wef 23/08/2004]

(9) An insurer may, where there is a surplus of assets over liabilities of an insurance fund, at any time withdraw from the fund an amount not exceeding the surplus over any fund solvency requirement prescribed for that fund under section 18 if and only if —

(a)	there is no provision in any instrument or contract binding the insurer disallowing such a withdrawal; and
(b)	the insurer ascertains from the latest statement of accounts lodged with the Authority in accordance with section 36 or such other subsequent audited statement of accounts provided to the Authority that there is in fact such a surplus at the time of the withdrawal. [23/2003 wef 23/08/2004]

(10) On the making of any withdrawal in accordance with subsection (9), the surplus of the fund shall, for the purposes of this section, be treated as reduced by the amount withdrawn.

[23/2003 wef 23/08/2004]

(11) Any amount withdrawn from an insurance fund under subsection (9) 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) [Deleted by Act 16/2011 wef 01/05/2011]

(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]

Fund solvency requirements and capital adequacy requirements

18.—(1) Every registered insurer shall satisfy —

(a)	such fund solvency requirements in respect of each insurance fund established by the insurer under this Act; and
(b)	such capital adequacy requirements,

as may be prescribed or specified in directions for the purposes of this section.

[23/2003 wef 23/08/2004]

(2) The Authority may prescribe —

(a)	different fund solvency requirements or capital adequacy requirements under subsection (1) for different classes of insurance business and for different types of insurers; and
(b)	in respect of any type of insurers, any exception from the requirements of subsection (1). [11/86]

(3) Without prejudice to the generality of section 64, regulations made under this Act may —

(a)	provide for the determination of the value of assets and the amount of liabilities in any case in which the value or amount is required by this section to be determined in accordance with valuation regulations;
(b)	provide that, for any specified purpose, assets or liabilities of any specified class or description shall be left out of account or shall be taken into account only to a specified extent; and
(c)	make different provision in relation to different cases or circumstances. [11/86]

(4) The Authority may by notice in writing, if it considers it appropriate in the particular circumstances of a registered insurer having regard to the risks arising from the activities of the insurer and such other factors as the Authority considers relevant, direct that the insurer satisfy fund solvency requirements or capital adequacy requirements other than those that the insurer is required to maintain under this section.

[23/2003 wef 23/08/2004]

(5) Without prejudice to the generality of section 41, the failure of a registered insurer to comply with subsection (1) or (4) shall be sufficient cause for the Authority to be satisfied that the affairs of the insurer are being conducted in a manner likely to be detrimental to the public interest or the interests of the policy owners and to issue such directions under section 41(1) as the Authority may consider necessary.

[23/2003 wef 23/08/2004]

Form, investment and situation of assets

19. Regulations made under this Act may make provision for securing that, in such circumstances and to such extent as may be prescribed —

(a)	the assets of any insurance fund of a registered insurer are invested in such manner and maintained in such places as may be prescribed; and
(b)	the nature of the assets is appropriate in relation to the currency in which the liabilities of the insurer are or may be required to be met. [11/86]

Requirements as to documents evidencing title to assets of insurance funds

20.—(1) Where an insurer has established an insurance fund under this Act, the insurer shall secure that any document evidencing the insurer’s title to assets of the fund, so long as the document is held by or on behalf of the insurer, shall be kept in Singapore or, if not so kept, shall be kept in the custody of a person in accordance with such directions as may be issued by the Authority.

[11/86; 41/2001]

(2) An insurer who has established an insurance fund under this Act shall from time to time notify the Authority in writing —

(a)	the person having the custody of any such document on behalf of the insurer, and the fact of any person ceasing to do so; and
(b)	the reason why any such document is not held by or on behalf of the insurer, and the identity of the document in question. [11/86]

(3) Any such document which is, for the time being, held by or on behalf of the insurer shall, on the Authority giving not less than 14 days notice in writing to the insurer or to the person having the custody of the document, be produced for inspection to the Authority or a person nominated by it by the person to whom the notice is given.

[11/86]

(4) Any person who fails to comply with this section shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $12,500 and, in the case of a continuing offence, to a further fine not exceeding $1,250 for every day during which the offence continues after conviction.

[11/86; 41/2001]

Maintenance of assets in Singapore

21.—(1) Where the Authority is satisfied that there exists a ground on which the Authority would be empowered by section 12 to cancel the registration, or by section 12A to withdraw the authorisation, of an insurer, the Authority may require that assets of the insurer of a value which at any time is equal to the whole or a specified proportion of the amount of its domestic liabilities shall be maintained in Singapore.

[11/86]

(2) The Authority may direct that, for the purposes of any requirement under this section, assets of a specified class or description shall or shall not be treated as assets maintained in Singapore.

[11/86]

(3) The Authority may direct that, for the purposes of any requirement under this section, the domestic liabilities of a registered insurer or an authorised reinsurer, or such liabilities of any class or description, shall be taken to be the net liabilities after deducting any part of them which is reinsured.

[11/86]

(4) A requirement imposed under this section may be framed so as to come into effect immediately after the day on which it is imposed or so as to come into effect after the expiration of a specified period or such longer period as the Authority may allow.

[11/86]

(5) In this section —

(a)	any reference to a domestic liability of a registered insurer is a reference to a liability of the insurance business carried on by the insurer in Singapore, including the liability to satisfy the fund solvency requirements and capital adequacy requirements prescribed under section 18; and
(b)	any reference to a domestic liability of an authorised insurer is a reference to any liability incurred by the authorised reinsurer as a result of carrying on the business of providing reinsurance of liabilities under insurance policies to persons in Singapore. [23/2003 wef 23/08/2004]

(6) Subject to subsection (7), in computing the amount of any liabilities for the purposes of this section, all contingent and prospective liabilities shall be taken into account but not liabilities in respect of share capital.

[11/86]

(7) For the purposes of this section, the value of any assets and the amount of any liabilities shall be determined in accordance with any valuation regulations made under this Act or any direction of the Authority.

[11/86]

Custody of assets

22.—(1) The Authority may, in the case of a registered insurer or an authorised reinsurer on which a requirement has been imposed under section 21, impose an additional requirement that the whole or a specified proportion of the assets to which the requirement under that section applies shall be held by a person approved by the Authority for the purposes of the requirement under this section as trustee for the insurer.

[11/86]

(2) Section 21(4) shall apply to any requirement under this section.

[11/86]

(3) Assets of a registered insurer or an authorised reinsurer held by a person as trustee for the insurer shall be taken to be held by him in compliance with a requirement imposed under this section if, and only if —

(a)	they are assets in whose case the insurer has given him written notice that they are to be held by him in compliance with such a requirement; or
(b)	they are assets into which assets in whose case the insurer has given him such written notice have, by any transaction or series of transactions, been transposed by him on the instructions of the insurer. [11/86]

(4) No assets held by a person as trustee for a registered insurer or an authorised reinsurer in compliance with a requirement imposed under this section shall, so long as the requirement is in force, be released except with the consent of the Authority.

[11/86]

(5) If a mortgage or charge is created by a registered insurer or an authorised reinsurer at a time when there is in force a requirement imposed on the insurer by virtue of this section, being a mortgage or charge conferring a security on any assets which are held by a person as trustee for the insurer in compliance with the requirement, the mortgage or charge shall, to the extent that it confers such a security, be void against the liquidator and any creditor of the insurer.

[11/86]

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