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]