PART 3AA
TRANSFER OF BUSINESS AND SHARES,
RESTRUCTURING OF LICENSED INSURER
AND WINDING UP
Division 1 — Voluntary transfer of business
Interpretation of this Division
116.  In this Division —
“transferee” means a licensed insurer, a company or a co‑operative society which has applied or will be applying for a licence to carry on the relevant class or classes of business, to which the whole or part of a transferor’s business is or is to be, or is proposed to be, transferred under this Division;
“transferor” means a licensed insurer, the whole or part of the business of which is or is to be, or is proposed to be, transferred under this Division.
[49FA
[16/2011; 11/2013]
Voluntary transfer of business
117.—(1)  The whole or part of the insurance business of a transferor may only be transferred to a transferee in respect of the class or classes of business to be transferred if —
(a)the transfer is effected by a scheme under this section; and
(b)the transferor has obtained the approval of the Authority for such a transfer.
[16/2011; 11/2013]
(2)  Any approval granted by the Authority under this section for the transfer of the whole or part of the insurance business of a licensed insurer may be subject to such conditions as the Authority may determine.
[16/2011; 11/2013]
(3)  The Authority may at any time, add to, vary or revoke any conditions imposed under subsection (2).
[16/2011]
(4)  Subsection (1) does not apply to the transfer of the whole or part of any insurance business of a company established or incorporated outside Singapore, except insofar as it relates to Singapore policies or offshore policies.
[11/2013]
(5)  Subject to subsection (7), subsection (1)(a) does not apply to the transfer of the whole or part of any insurance business of —
(a)a licensed insurer where it relates to the reinsurance business of that insurer; or
(b)a captive insurer.
[11/2013]
(6)  To avoid doubt, subsection (5)(a) does not affect, in relation to the transfer of the whole or any part of any insurance business of a licensed direct insurer under subsection (1), the reinsurance of liabilities under such transferred insurance business.
[16/2011; 11/2013]
(7)  A licensed insurer which falls within subsection (5)(a) or (b) may apply to the Authority in writing for consent to transfer the whole or part of its insurance business to another licensed insurer, by a scheme under this section, in which event Division 1 of this Part applies to the licensed insurer.
[16/2011; 11/2013]
(8)  Any licensed insurer, not being a company established or incorporated outside Singapore, has by virtue of this section power to make such a transfer by a scheme under this section, and the directors have authority on behalf of the insurer to arrange for and do all things necessary to give effect to such a transfer.
[16/2011; 11/2013]
(9)  Subsection (8) applies despite the absence of the power or authority mentioned in that subsection under the constitution of the licensed insurer or any limitation imposed by its constitution on its powers or on the authority of its directors.
[16/2011; 11/2013]
(10)  A scheme under this section may provide for the business in question to be transferred to a body not licensed as an insurer under this Act in respect of the relevant class of business (including a body not yet in existence), if the scheme is so framed as to operate only in the event of the body becoming so licensed.
[16/2011; 11/2013]
(11)  A scheme under this section for the transfer of any insurance business by a transferor may extend to the transfer with it of any other business, not being insurance business, where the other business is carried on by the transferor as ancillary only to the insurance business transferred.
[16/2011]
(12)  A scheme under this section may include provision for matters incidental to the transfer thereby effected, and provision for giving effect to that transfer and, in particular —
(a)for any property, rights or liabilities of the transferor (including assets comprised in a deposit under this Act or in an insurance fund) to vest, by virtue of the scheme and without further or other assurance, in the transferee; and
(b)for the registration by the transferee of policies transferred, for the amounts to be included in respect of those policies in the transferee’s insurance fund and for other matters arising under this Act out of the transfer.
[16/2011]
(13)  A scheme under this section has no effect unless confirmed by the General Division of the High Court, but may be prepared and submitted for confirmation to the General Division of the High Court by any of the insurers concerned.
[16/2011; 40/2019]
(14)  If so confirmed, the scheme has effect according to its tenor despite anything in the preceding sections of this Act and is binding on any person thereby affected.
[49FB
[16/2011]
Confirmation of schemes
118.—(1)  Before an application is made to the General Division of the High Court for confirmation of a scheme under section 117 —
(a)a copy of the scheme must be lodged with the Authority together with copies of the actuarial and other reports (if any) upon which the scheme is founded after the transferor has obtained the approval of the Authority pursuant to section 117(1);
(b)not earlier than one month after the copy is so lodged, notice of the intention to make the application (containing such particulars as are prescribed) must be published in the Gazette and in at least 2 newspapers approved by the Authority; and
(c)for a period of 15 days after the publication of the notice, a copy of the scheme must be kept at each office in Singapore of the transferor and must be opened to inspection by all members and policy owners of the transferor who are affected by the scheme.
[16/2011; 40/2019]
(2)  The Authority may cause a report on the scheme to be made by an actuary independent of the parties to the scheme and, if it does so, must cause a copy of the report to be sent to each of the transferor and transferee.
[16/2011]
(3)  Copies of the scheme and any such report as is mentioned in subsection (1)(a) or (2), or summaries approved by the Authority of the scheme and any such report, must, except insofar as the General Division of the High Court upon application made in that behalf otherwise directs, be transmitted by the transferor and transferee, at least 15 days before application is made for confirmation of the scheme, to every policy owner affected by the scheme.
[16/2011; 40/2019]
(4)  An application to the General Division of the High Court with respect to any matter connected with the scheme may, at any time before confirmation by the General Division of the High Court, be made by the Authority or by any person who, in the opinion of the General Division of the High Court, is likely to be affected by the scheme.
[16/2011; 40/2019]
(5)  The General Division of the High Court may confirm the scheme without modification or subject to modifications agreed to by the transferor and transferee, or may refuse to confirm the scheme.
[16/2011; 40/2019]
(6)  The transferor and transferee are jointly and severally liable to reimburse to the Authority any expenses incurred by the Authority under this section in connection with any scheme or proposed scheme (subject to any order of the General Division of the High Court as to costs).
[16/2011; 40/2019]
(7)  The scheme or proposed scheme referred to in subsection (6) must include provision as to how that liability is, as between the transferor and transferee, to be borne.
[49FC
[16/2011]
Documents to be filed when scheme confirmed
119.—(1)  Where, by a scheme under section 117, the insurance business of a transferor is transferred to a transferee, the transferee must, within one month after the scheme takes effect, lodge with the Authority —
(a)statements of the assets and liabilities of each of the transferor and transferee as at the time immediately before the transfer, signed on behalf of the transferor or transferee (as the case may be) and in the case of the transferor, indicating whether the transfer is of the whole of the transferor’s business and, if not, the extent to which the transferor’s assets and liabilities relate to the business transferred;
(b)a copy of the scheme as confirmed by the General Division of the High Court, and a certified copy of the order of the General Division of the High Court confirming the scheme;
(c)copies of any actuarial or other reports upon which the scheme was founded (being reports made since a copy of the scheme was lodged under section 118(1));
(d)a statement, in such form and manner as the Authority may specify in writing, from an auditor of the transferee who satisfies the conditions mentioned in section 94(7)(a) and (b) certifying that the assets and liabilities of the transferor relating to the business transferred have been assumed and accounted for in the books of the transferee; and
(e)a statutory declaration made by the chairperson of the board of directors of the transferee, or by its chief executive, fully setting forth every payment made or to be made to any person on account of the transfer, and stating that, to the best of his or her belief, no other payment beyond those so set forth has been, or is to be, made on account thereof by or with the knowledge of any insurer concerned; and in this paragraph, references to the making of a payment include references to the transfer of property or rights of any description.
[16/2011; 11/2013; 40/2019]
(2)  If the statement lodged in accordance with subsection (1)(d) is not in the form or manner specified by the Authority of the Authority, the Authority may, by written notice, give such directions to the transferee to procure that the statement contains such particulars as may be necessary for the purposes of subsection (1)(d), but nothing in this subsection compels an auditor to amend the auditor’s opinion in the statement.
[11/2013]
(3)  On the confirmation of a scheme under section 118, each of the transferor and transferee must (unless it is an unincorporated company) file a copy of the scheme with the Registrar of Companies or, in the case of co‑operative societies, with the Registrar of Co‑operative Societies.
[16/2011; 11/2013]
(4)  Any transferee which fails to comply with any direction of the Authority under subsection (2) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000.
[49FD
[11/2013]
Division 2 — [Repealed by Act 31 of 2017]
Division 3 — [Repealed by Act 31 of 2017]
Division 4 — [Repealed by Act 31 of 2017]
Division 5 — Winding up
General provisions as to winding up
120.—(1)  This section is to be read together with section 63 of the Financial Services and Markets Act 2022.
[16/2011; 31/2017]
[Act 18 of 2022 wef 10/05/2024]
(2)  Despite any written law or rule of law, a liquidator appointed in respect of a licensed insurer carrying on insurance business in Singapore must, when winding up the licensed insurer —
(a)endeavour, as far as reasonably practicable, to sell or transfer the whole or part of the insurance business of the licensed insurer to any other insurer licensed to carry on the relevant class or classes of business;
(b)continue to carry on the insurance business of the licensed insurer until the whole insurance business is transferred to another insurer licensed to carry on the relevant class or classes of business, unless directed by the Court; and
(c)have all necessary powers to carry out the functions set out in paragraphs (a) and (b).
[16/2011; 11/2013]
(3)  The Authority may at any time appoint one or more actuaries to perform an independent assessment of, and provide a report on, the proposed transfer of the insurance business of a company by a liquidator pursuant to subsection (2).
[16/2011]
(4)  The remuneration and expenses of any actuary appointed under subsection (3) must be paid by the licensed insurer.
[16/2011; 11/2013]
(5)  The Authority must serve a copy of any report provided under subsection (3) on the liquidator.
[16/2011]
(6)  The Authority must be a party to any proceedings under the Insolvency, Restructuring and Dissolution Act 2018 relating to the winding up of the affairs of an insurer licensed under this Act or an insurance broker registered under this Act, and the liquidator in such a winding up must give the Authority such information as it may from time to time require about the affairs of the insurer or insurance broker, as the case may be.
[16/2011; 11/2013; 40/2018]
(7)  For the purposes of any proceedings under the Insolvency, Restructuring and Dissolution Act 2018 for the winding up of the affairs of such an insurer by the Court, the contingent and prospective liabilities of the insurer in respect of policies are, in determining whether it is unable to pay its debts, to be estimated in accordance with such rules as may be prescribed.
[16/2011; 40/2018]
(8)  If the Authority submits to the Rules Committee, established under any written law relating to the courts, proposals for making special provision under section 448 of the Insolvency, Restructuring and Dissolution Act 2018 in relation to insurers licensed under this Act or any description of such insurers, the Rules Committee may by rules made under that section give effect to the proposals, either as submitted or subject to such modifications as the Rules Committee may think fit.
[16/2011; 11/2013; 40/2018]
(9)  Proposals under subsection (8), and rules made by virtue thereof, may provide for modifying or excluding, in relation to insurers so licensed, provisions of Parts 8 and 9 of the Insolvency, Restructuring and Dissolution Act 2018 requiring the holding of meetings or otherwise relating to the procedure in a winding up.
[16/2011; 11/2013; 40/2018]
[Act 31 of 2022 wef 01/11/2022]
(10)  In the winding up of the affairs of a licensed insurer, section 218(2) to (8) of the Insolvency, Restructuring and Dissolution Act 2018 does not apply to the valuation of liabilities in respect of policies; but in any such winding up, whether the insurer is insolvent or not, those liabilities are to be estimated in accordance with the rules prescribed under subsection (7) and, as regards matters not fixed by the rules, on a basis approved by the Court.
[16/2011; 11/2013; 40/2018]
(11)  In a members’ voluntary winding up, the basis to be adopted as regards matters not fixed by the rules may be approved by the Authority instead of by the Court.
[16/2011]
(12)  References in this section to a licensed insurer extend also to a Singapore insurer which has ceased to be so licensed but remains under any liability in respect of Singapore policies or offshore policies.
[16/2011; 11/2013]
(13)  In this section —
“Court” means the General Division of the High Court;
“liquidator” includes a provisional liquidator.
[49FO
[16/2011; 40/2018; 40/2019]
Special provision for insurers directed to cease insurance business
121.—(1)  Where the Authority gives an insurer a direction under section 102(2)(a)(v) by reason of the insolvency of the fund maintained by the insurer under this Act for either class of insurance business, the affairs of the insurer may be wound up by the Court under the Insolvency, Restructuring and Dissolution Act 2018 as if it had suspended its business for a whole year or, in the case of a winding up under Part 10 of that Act, as if it had ceased to carry on business.
[16/2011; 40/2018]
(2)  Where the Authority gives an insurer a direction under section 102(2)(a)(v) but, on an application for the affairs of the insurer to be wound up by the Court, the Court is satisfied that the insurer will be able to pay its debts in full within 12 months or any longer period that the Court thinks reasonable, the Court may (if it thinks fit) order the affairs of the insurer to be wound up only as regards the insurance fund maintained for the class of insurance business to which the direction relates.
[16/2011]
(3)  An order made under subsection (2) for a limited winding up is of the same effect as an order for the affairs of the insurer to be wound up generally, except insofar as this section otherwise provides.
[16/2011]
(4)  Where such an order is made, the powers of the liquidator are exercisable only for the purpose of applying the assets of the relevant insurance fund in discharging the liabilities to which they are applicable, together with the costs, charges and expenses incurred in the winding up.
[16/2011]
(5)  The insurer must, from time to time, as the Court may direct, make such additions to those assets as are required to secure that they are sufficient for the purpose or must, if the Court so directs, discharge any of those liabilities out of other assets.
[16/2011]
(6)  In the winding up of the affairs of an insurer under such an order, the Insolvency, Restructuring and Dissolution Act 2018 has effect subject to the following modifications:
(a)section 121 (or, as the case may be, section 247) of that Act and other sections so far as they relate to contributories do not apply;
(b)section 129 applies after, as it applies before, the making of the winding up order, and section 133(1) of that Act does not apply;
(c)sections 130, 194, 205, 206, 207, 224 to 233 of that Act do not apply.
[40/2018]
(7)  Where such an order is made, the Court may, at any time, on the application of the liquidator or of any person who might apply for the affairs of the insurer to be wound up —
(a)substitute an order for the affairs of the insurer to be wound up generally; and
(b)give any directions that the Court thinks fit as to matters in progress under the previous order,
and, subject to any such directions, the winding up is, for all purposes connected with the substituted order, deemed to have commenced at the time of the application for that order.
[16/2011]
(8)  In this section, “Court” means the General Division of the High Court.
[49FP
[16/2011; 40/2019]
Co-operative societies doing insurance business
122.—(1)  Where a co-operative society is a licensed insurer, no proceedings for the transfer of assets and liabilities, dissolution or winding up of the co‑operative society may be taken under sections 74, 75 and 83 to 89 of the Co‑operative Societies Act 1979.
[16/2011; 11/2013]
(2)  Despite section 101 of the Co‑operative Societies Act 1979, any co‑operative society which is a licensed insurer is deemed to be an unregistered company within the meaning of Part 10 of the Insolvency, Restructuring and Dissolution Act 2018 and may be wound up by the Court under the Insolvency, Restructuring and Dissolution Act 2018 (as modified by this section) and the applicable provisions of this Part.
[16/2011; 11/2013; 40/2018]
(3)  In any such winding up —
(a)in applying the provisions of the Insolvency, Restructuring and Dissolution Act 2018, any reference to the Registrar of Companies is to be read as a reference to the Registrar under the Co‑operative Societies Act 1979;
(b)upon winding up of the society, the assets must be applied first to the cost of liquidation, then to the discharge of the liabilities of the society (where the priority of claim set out in section 123 applies to unsecured liabilities of the licensed insurer), then to the payment of the share capital or subscription capital, and then, provided that the by‑laws of the society permit, to the payment of a dividend or patronage refund at a rate not exceeding that laid down in the Co‑operative Societies Rules 2009 or in the by‑laws for any period during which no dividend or patronage refund was in fact paid; and
(c)any moneys remaining after the application of the funds to the purposes specified in paragraph (b), must be carried to the Co‑operative Societies Liquidation Account kept by the Registrar and section 89(5) and (6) of the Co‑operative Societies Act 1979 applies to deal with the moneys in the Co‑operative Societies Liquidation Account.
[16/2011; 11/2013; 40/2018]
(4)  Despite subsection (2) and section 101 of the Co‑operative Societies Act 1979, in any winding up of a co‑operative society that is a licensed insurer, section 344 of the Companies Act 1967 is applicable and in applying this provision —
(a)any reference to the register under the Companies Act 1967 is to be read as a reference to the register of societies mentioned in section 10A(1)(a) of the Co‑operative Societies Act 1979; and
(b)any reference to the Registrar under the Companies Act 1967 is to be read as a reference to the Registrar under the Co‑operative Societies Act 1979.
[40/2018]
(5)  In this section, “Court” means the General Division of the High Court.
[49FQ
[16/2011; 40/2019]
Priority of claims of policy owners and specified liabilities
123.—(1)  Where a licensed insurer becomes unable to meet its obligations or becomes insolvent, the assets of the licensed insurer subject to section 16(12), must be available to meet all liabilities in Singapore of the licensed insurer specified in subsection (3), including liabilities which are properly attributable to the business to which an insurance fund relates.
[16/2011; 11/2013]
(2)  The liabilities in Singapore of the licensed insurer specified in subsection (3) have priority over all unsecured liabilities of the insurer other than the preferential debts specified in section 203(1) of the Insolvency, Restructuring and Dissolution Act 2018.
[16/2011; 11/2013; 40/2018]
(3)  Despite any written law or any rule of law relating to the winding up of companies, in the event of a winding up of a licensed insurer, the following liabilities in Singapore of the licensed insurer (which include liabilities which are properly attributable to the business to which an insurance fund relates) rank in the following order of priority:
(a)firstly, any levy due and payable by the licensed insurer under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011;
(b)secondly, protected liabilities incurred by the licensed insurer, up to the amount paid or payable out of any of the PPF Funds by the PPF Agency under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011 in respect of such protected liabilities and, if applicable, the amount paid or payable out of any of the PPF Funds by the PPF Agency under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011 to fund any transfer or run-off of the business of the licensed insurer or the termination of insured policies issued by the licensed insurer;
(c)thirdly, any liabilities incurred by the licensed insurer in respect of direct policies which are not protected under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011;
(d)fourthly, any liabilities incurred by the licensed insurer in respect of reinsurance policies;
(e)fifthly, any sum claimed by the trustee of a resolution fund (within the meaning of section 107 of the Financial Services and Markets Act 2022) from the licensed insurer under section 112, 113, 114 or 115 of that Act.
[16/2011; 11/2013; 31/2017; 31/2018]
[Act 18 of 2022 wef 10/05/2024]
(4)  The liabilities in each class specified in subsection (3) —
(a)rank in the order specified therein but as between liabilities of the same class rank equally between themselves; and
(b)are to be paid in full unless the assets of the licensed insurer are insufficient to meet them in which case they are to abate in equal proportions between themselves.
[16/2011; 11/2013]
(5)  In this section, “protected liabilities” has the meaning given by the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011.
[49FR
[16/2011]
Division 6 — Miscellaneous
Power to obtain information under this Part
124.—(1)  The Minister or the Authority may require a person to provide, within the period and in the manner specified by the Minister or the Authority, any information that the Minister or the Authority may reasonably require for the discharge of his, her or its duties or functions, or the exercise of his, her or its powers, under this Part.
[16/2011]
(2)  Any person who —
(a)without reasonable excuse, fails to comply with any requirement under subsection (1); or
(b)in purported compliance with any requirement under subsection (1), knowingly or recklessly provides any information or document that is false or misleading in a material particular,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part of a day during which the offence continues after conviction.
[49FT
[16/2011; 11/2013]
Recovery of fees, expenses, etc.
125.  Any remuneration and expenses payable by a licensed insurer to —
(a)a statutory manager appointed under section 102; and
(b)any person appointed to perform any independent assessment under this Part,
is recoverable as a civil debt due to the Authority from the licensed insurer.
[49FV
[16/2011; 11/2013]
Regulations for this Part
126.—(1)  The Minister may make such regulations as may be necessary or expedient for carrying out the purposes and provisions of this Part and for prescribing anything that may be required to be prescribed under this Part.
[16/2011; 11/2013]
(2)  Without limiting subsection (1), regulations made under this section may —
(a)provide that any contravention of any specified provision of the regulations shall be an offence punishable —
(i)in the case of an individual, with a fine not exceeding $125,000 or with imprisonment for a term not exceeding 3 years or with both and, in the case of a continuing offence, with a further fine not exceeding $12,500 for every day or part of a day during which the offence continues after conviction; or
(ii)in any other case, with a fine not exceeding $250,000 and, in the case of a continuing offence, with a further fine not exceeding $25,000 for every day or part of a day during which the offence continues after conviction; and
(b)exempt any person or class of persons from all or any of the provisions of this Part and the regulations, subject to such conditions or restrictions as may be prescribed.
[11/2013; 31/2017]
(3)  All regulations made under this section must be presented to Parliament as soon as possible after publication in the Gazette.
[49FW
[11/2013]