Division 3 — Authorised reinsurers
[Act 11 of 2013 wef 18/04/2013]
Authorisation of reinsurers
34.—(1)  A person carrying on reinsurance business outside Singapore may apply to the Authority to be authorised for the purposes of this Act in such form and manner as the Authority may prescribe.
(2)  The Authority may require the applicant to furnish it with such information or documents as the Authority considers necessary in relation to the application.
(3)  The Authority may authorise the applicant with or without conditions, or refuse to authorise the applicant on any prescribed ground or on such other ground as the Authority thinks fit.
(4)  The Authority may authorise the applicant as a general reinsurer or life reinsurer or both.
(5)  The Authority shall cause notice of any authorisation or change of name of a reinsurer authorised under this section to be published in the Gazette.
(6)  Any applicant which is aggrieved by the refusal of the Authority to authorise it under this section may, within 30 days after being informed of the decision of the Authority, appeal to the Minister in writing in accordance with Part IIIB.
(7)  The Authority may at any time add to, vary or revoke any of the existing conditions of authorisation of a reinsurer or impose any conditions thereto.
(8)  Any authorised reinsurer which fails to comply with any condition imposed by the Authority under subsection (3) or (7) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part thereof during which the offence continues after conviction.
[Act 11 of 2013 wef 18/04/2013]
Annual fees of authorised reinsurers
34A.—(1)  Every authorised reinsurer shall pay to the Authority such annual fees as may be prescribed.
(2)  The Authority may prescribe different annual fees for different classes of reinsurance business or for different types of authorised reinsurers.
(3)  The Authority may, where it considers appropriate in a particular case, waive, refund or remit the whole or any part of any annual fee paid or payable under subsection (1).
[Act 11 of 2013 wef 18/04/2013]
Withdrawal of authorisation
34B.—(1)  The Authority may by order withdraw the authorisation of any reinsurer, either wholly or in respect of a class of business, at the request of the reinsurer or on any of the grounds set out in subsection (2).
(2)  The grounds referred to in subsection (1) are as follows:
(a)the reinsurer has not commenced the business of providing reinsurance of liabilities under insurance policies to persons in Singapore within 12 months after being authorised;
(b)the reinsurer has ceased to carry on the business of providing reinsurance of liabilities under insurance policies to persons in Singapore whether wholly or in respect of any class of business;
(c)it appears to the Authority that the reinsurer has failed to satisfy an obligation to which the reinsurer is subject by virtue of this Act;
(d)the reinsurer proposes to make or has made, whether in Singapore or elsewhere, any composition or arrangement with its creditors, has gone into liquidation or has been wound up or otherwise dissolved;
(e)a receiver, a receiver and manager, a judicial manager, or any other person having the powers and duties of a receiver, a receiver and manager or a judicial manager, has been appointed, whether in Singapore or elsewhere, in relation to, or in respect of any property of, the reinsurer or any of the shareholders of the reinsurer having control of the reinsurer;
(f)there is a change of a person having control of the reinsurer, and —
(i)the new person having control of the reinsurer is not a fit and proper person; or
(ii)the Authority is not satisfied as to the financial standing of the reinsurer after the change;
(g)the reinsurer is carrying on its business in a manner likely to be detrimental to the interests of its policy owners, whether in Singapore or elsewhere;
(h)the reinsurer is unable to meet its obligations, whether in Singapore or elsewhere;
(i)the reinsurer has contravened or is contravening —
(i)any condition of its authorisation;
(ii)any direction given by the Authority under this Act; or
(iii)any provision of this Act;
(j)any of the officers of the reinsurer holding a managerial or executive position has been convicted of any offence under this Act committed before, on or after the date of commencement of section 28 of the Insurance (Amendment) Act 2013;
(k)the reinsurer has furnished false, misleading or inaccurate information, or has concealed or failed to disclose material facts, in its application for authorisation;
(l)the reinsurer has had its licence or authority to operate withdrawn by the supervisory authority which is responsible, under the laws of the foreign country where the reinsurer is incorporated, formed or established, for supervising the reinsurer; or
(m)it is in the public interest to withdraw the authorisation.
(3)  Before withdrawing the authorisation of a reinsurer under subsection (1) other than at the request of the reinsurer, the Authority shall —
(a)give the reinsurer notice in writing of the Authority’s intention to do so; and
(b)in the notice referred to in paragraph (a), call upon the reinsurer to show cause, within such time as may be specified in the notice, as to why the authorisation should not be withdrawn.
(4)  If the reinsurer referred to in subsection (3) —
(a)fails to show cause within the time specified under subsection (3)(b) or within such extended period of time as the Authority may allow; or
(b)fails to show sufficient cause,
the Authority shall give notice in writing to the reinsurer of the date on which the withdrawal of authorisation is to take effect.
(5)  An order to withdraw the authorisation of any reinsurer made under subsection (1) other than at the request of the reinsurer shall not take effect until the expiration of a period of 30 days after the Authority has informed the reinsurer of the withdrawal under subsection (4).
(6)  Any reinsurer which is aggrieved by a decision of the Authority under subsection (1) to withdraw the reinsurer’s authorisation other than at the reinsurer’s request may, within 30 days after the Authority has informed the reinsurer of the withdrawal under subsection (4), appeal to the Minister in writing in accordance with Part IIIB.
(7)  If, within the period referred to in subsection (6), the reinsurer concerned gives notice of appeal to the Minister, the order by the Authority to withdraw the authorisation of the reinsurer shall not take effect unless the order is confirmed by the Minister or the appeal is for any reason dismissed by the Minister.
(8)  Notwithstanding the withdrawal of the authorisation of a reinsurer under subsection (1), so long as the reinsurer remains under any liability in respect of insurance policies belonging to the class of insurance business to which the authorisation relates, the reinsurer shall take such action as it considers necessary or as may be required by the Authority to ensure that —
(a)reasonable provision has been or will be made for that liability; and
(b)adequate arrangements exist or will exist for the payment of premiums and claims on those policies.
(9)  For the purposes of this section —
(a)a person shall be regarded as having control of a reinsurer if the person alone or together with any associate or associates —
(i)holds 50% or more of the issued share capital (if any) of the reinsurer; or
(ii)is in a position to control 50% or more of the voting power in the reinsurer;
(b)a reference to voting power in a reinsurer is a reference to the total number of votes that might be cast in a general meeting of the reinsurer; and
(c)a person, A, is an associate of another person, B, if —
(i)A is the spouse, or a parent, remoter lineal ancestor or step-parent, a son, daughter, remoter issue, step-son or step-daughter, or a brother or sister, of B;
(ii)A is a body corporate that is, or a majority of the directors of which are, accustomed or under an obligation whether formal or informal to act in accordance with the directions, instructions or wishes of B;
[Act 35 of 2014 wef 01/07/2015]
(iii)[Deleted by Act 35 of 2014 wef 01/07/2015]
(iv)A is a person who is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of B;
(v)A is a subsidiary of B;
[Act 35 of 2014 wef 01/07/2015]
(vi)[Deleted by Act 35 of 2014 wef 01/07/2015]
(vii)A is a body corporate in which B, alone or together with other associates of B as described in sub-paragraphs (ii), (iv) and (v), is in a position to control not less than 20% of the voting power in A; or
[Act 35 of 2014 wef 01/07/2015]
(viii)[Deleted by Act 35 of 2014 wef 01/07/2015]
(ix)A is a person with whom B has an agreement or arrangement, whether oral or in writing and whether express or implied, to act together with respect to the acquisition, holding or disposal of shares or other interests in, or with respect to the exercise of their voting power in relation to, the reinsurer.
[Act 11 of 2013 wef 18/04/2013]
Effects of withdrawal of authorisation
34C.—(1)  Where an order of withdrawal of the authorisation of a reinsurer under section 34B becomes effective —
(a)the Authority shall publish a notice of the withdrawal in the Gazette; and
(b)the reinsurer shall, as from the date of withdrawal, cease to carry on the business of providing reinsurance of liabilities under insurance policies to persons in Singapore wholly or of the class in respect of which its authorisation has been withdrawn, as the case may be.
(2)  Subsection (1)(b) shall not prejudice —
(a)the enforcement by any policy owner or person of any right or claim against the reinsurer or by the reinsurer of any right or claim against any policy owner or person; and
(b)the collection or receipt of premiums on insurance policies effected before the date of withdrawal of the authorisation and belonging to the class of insurance business in respect of which the authorisation has been withdrawn,
and section 3 shall not apply to the reinsurer in respect of the collection or receipt of the premiums referred to in paragraph (b).
[Act 11 of 2013 wef 18/04/2013]
Deposits by authorised reinsurers
34D.—(1)  Every authorised reinsurer shall maintain a reinsurance deposit of a value of such amount as the Authority may prescribe for the purposes of this section 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 or specified in directions by the Authority for the purposes of this section.
(3)  All income accruing in respect of a deposit under subsection (1) shall be payable to the authorised reinsurer 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.
[Act 11 of 2013 wef 18/04/2013]
Bank covenants in lieu of deposits
34E.—(1)  If, in the case of any authorised reinsurer, 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 reinsurer’s deposit under section 34D(1); 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 reinsurer 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.
(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 authorised reinsurer under section 34D.
[Act 11 of 2013 wef 18/04/2013]
Maintenance of assets by authorised reinsurers
34F.—(1)  The Authority may, from time to time, by notice in writing to any authorised reinsurer, or any class of authorised reinsurers, direct the reinsurer or class of reinsurers, as the case may be, each to maintain and hold such minimum amount or amounts of assets in Singapore as may be specified in the notice for the purpose of meeting its liabilities.
(2)  Without prejudice to the generality of subsection (1), the Authority may, in a notice issued under that subsection, specify —
(a)the types of liabilities in respect of which assets are to be maintained and held in Singapore;
(b)the types of assets that are to be treated as assets maintained and held in Singapore, and the minimum amount or amounts in respect of each asset for the purpose of any requirement of the Authority under that subsection; and
(c)the method for the valuation of assets maintained and held in Singapore, including any deduction to be made in respect of the assets.
(3)  Where the Authority issues a notice under subsection (1) to a class of authorised reinsurers, the Authority may direct different reinsurers within the class of reinsurers to maintain and hold different minimum amounts of assets in Singapore, having regard to the financial soundness of each reinsurer, the risk profile of each reinsurer and such other factors as the Authority may consider relevant.
(4)  Any authorised reinsurer which fails to comply with any direction of the Authority under subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part thereof during which the offence continues after conviction.
[Act 11 of 2013 wef 18/04/2013]
Custody of assets of authorised reinsurers
34G.—(1)  The Authority may, in the case of an authorised reinsurer on which a requirement has been imposed under section 34F, 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 reinsurer.
(2)  Assets of an authorised reinsurer held by a person as trustee for the reinsurer 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 which the reinsurer has given him written notice are to be held by him in compliance with such a requirement; or
(b)they are assets into which assets which the reinsurer has given him such written notice have, by any transaction or series of transactions, been transposed by him on the instructions of the reinsurer.
(3)  No assets held by a person as trustee for 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 written consent of the Authority.
(4)  If a mortgage or charge is created by an authorised reinsurer at a time when there is in force a requirement imposed on the reinsurer 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 reinsurer 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 reinsurer.
[Act 11 of 2013 wef 18/04/2013]
General obligation of authorised reinsurers to furnish information
34H.  The Authority may, by notice in writing, require any authorised reinsurer to furnish it with information about any matter related to any insurance business in respect of which the reinsurer is authorised if the Authority is of the opinion that it requires that information for the discharge of its functions under this Act.
[Act 11 of 2013 wef 18/04/2013]
Saving for validity of policies
35.  Nothing in this Part, Part IIA or IIB shall invalidate any policy or contract of insurance.
[41/2001]