Establishment of insurance funds and allocation of surplus
17.—(1)  Every licensed 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]
[Act 11 of 2013 wef 18/04/2013]
(1A)  Every direct insurer licensed 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]
[Act 11 of 2013 wef 18/04/2013]
(2)  If, in the case of a direct insurer licensed 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]
[Act 11 of 2013 wef 18/04/2013]
(3)  The Authority may require any licensed 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]
[Act 11 of 2013 wef 18/04/2013]
(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 licensed 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 the Authority may prescribe or specify in directions, as part of the insurance fund;
[Act 11 of 2013 wef 18/04/2013]
(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]
[Act 11 of 2013 wef 18/04/2013]
(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)  [Deleted by Act 11 of 2013 wef 18/04/2013]
(15)  [Deleted by Act 11 of 2013 wef 18/04/2013]
(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]