Insurance (Amendment) Act 1993 - Singapore Statutes Online

REPUBLIC OF SINGAPORE

GOVERNMENT GAZETTE

ACTS SUPPLEMENT

Published by Authority

NO. 30]

Friday, November 5

[1993

The following Act was passed by Parliament on 12th October 1993 and assented to by the President on 28th October 1993:—

Insurance (Amendment) Act 1993

(No. 32 of 1993)

I assent.

ONG TENG CHEONG

President.

28th October 1993.

Date of Commencement: 31st December 1993

An Act to amend the Insurance Act (Chapter 142 of the 1985 Revised Edition).

Be it enacted by the President with the advice and consent of the Parliament of Singapore, as follows:

Short title and commencement

1. This Act may be cited as the Insurance (Amendment) Act 1993 and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

Amendment of section 2

2. Section 2(1) of the Insurance Act is amended by deleting paragraph (b) and substituting the following paragraph:

“(b)

general business, that is to say, all insurance business which is not life business, and shall include the effecting and carrying out by any person, not being a person licensed under the Monetary Authority of Singapore Act (Cap. 186), Banking Act (Cap. 19), Finance Companies Act (Cap. 108), Securities Industry Act (Cap. 289) or Futures Trading Act (Cap. 116), of contracts for fidelity bonds, performance bonds, administration bonds, bail bonds or customs bonds or similar contracts of guarantee, being contracts effected by way of business (and not merely incidental to some other business carried on by the person effecting them) in return for the payment of one or more premiums.”.

Amendment of section 7

3. Section 7 of the Insurance Act is amended by deleting subsections (3) and (4) and substituting the following subsections:

“(3) The Authority may register the applicant as a direct insurer, reinsurer or captive insurer.

(4) The Authority shall cause notice of any registration or change of name of a Singapore insurer to be published in the Gazette.

(5) For the purposes of this Act —

“captive insurer” means an insurer whose registration is restricted to the carrying on of business which consists principally of risks of its related companies, and includes a rent-a-captive insurer;

“direct insurer” means any insurer other than a reinsurer or a captive insurer;

“reinsurer” means an insurer whose registration is restricted to the carrying on of reinsurance business.”.

Amendment of section 13

4. Section 13 of the Insurance Act is amended —

(a)	by inserting, immediately after “$500,000” at the end of subsection (1), the words “or such other amount as may be prescribed”; and
(b)	by inserting, immediately after “$500,000” in the third line of subsection (5), the words “or the amount prescribed”.

Amendment of section 16

5. Section 16 of the Insurance Act is amended —

(a)

by inserting, immediately after subsection (1), the following subsection:

“(1A) 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 insurance funds under subsection (1) and subject to such conditions as the Authority may impose, establish and maintain a separate insurance fund —

(a)	for its participating policies; and
(b)	for its non-participating policies.”;

(b)

by deleting the words “subsection (1)” in the third line of subsection (2) and substituting the words “subsections (1) and (1A)”;

(c)

by deleting subsections (4) and (5) and substituting the following subsections:

“(4) In the case of an insurance fund which comprises wholly or partly of participating life policies, no part of the fund shall be allocated by way of bonus to those policies except with the approval of an actuary and out of a surplus of assets over liabilities as shown on the last statutory valuation of the fund; and on the making of any such allocation that surplus shall be treated for the purposes of this section as reduced by the amount allocated.

(5) Subject to subsection (5A), if on the last statutory valuation in the case of an insurance fund which comprises wholly or partly of participating life policies, there was shown a surplus (as reduced under subsection (4)) of assets over liabilities of the fund, there may, subject to the approval of an actuary and to any provision to the contrary in any instrument or contract binding the insurer, be allocated to the shareholders or withdrawn from the fund an amount not exceeding the surplus, and on the making of any such allocation that surplus shall be treated for the purposes of this section as reduced by the amount allocated.

(5A) No part of the surplus shall be allocated under subsection (5) in any year in excess of the relevant percentage of the sum of —

(a)	the amount allocated in accordance with subsection (5); and
(b)	the amount allocated thereout by way of bonus to participating life policies in accordance with subsection (4) within that year.

(5B) For the purposes of subsection (5A), the relevant percentage —

(a)	in relation to 1993 is 18%;
(b)	in relation to 1994 is 16%;
(c)	in relation to 1995 is 14%;
(d)	in relation to 1996 is 12%; and
(e)	in relation to 1997 and any subsequent year is 10%.

(5C) If on the last statutory valuation in the case of an insurance fund established wholly in respect of non-participating life policies there was shown a surplus of assets over liabilities of the fund, there may, subject to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the surplus, and on the making of any such withdrawal that surplus shall, for the purposes of this section, be treated as reduced by the amount withdrawn.”; and

(d)

by inserting, immediately after the words “subsection (5),” in subsection (8), the word “(5C),”.

Amendment of section 20

6. Section 20(5) of the Insurance Act is amended by inserting, immediately after the word “Singapore” at the end thereof, the words “, including the margins of solvency prescribed under section 17”.

Amendment of section 23

7. Section 23 of the Insurance Act is amended by deleting the words “a qualified actuary” wherever they appear in subsections (1), (4) and (5) and substituting in each case the words “an actuary”.

Amendment of section 30

8. Section 30 of the Insurance Act is amended —

(a)

by inserting, immediately after subsection (1), the following subsections:

“(1A) A direct insurer registered to carry on life business shall appoint a person as actuary of the insurer to perform such duties as may be prescribed.

(1B) The appointment of the actuary by a direct insurer under subsection (1A) shall be made by the board of directors of the insurer in writing and shall be subject to the approval of the Authority.”; and

(b)

by inserting, immediately after the words “subsection (1)” in subsection (2), the words “or (1B)”.

New section 30A

9. The Insurance Act is amended by inserting, immediately after section 30, the following section:

“Restriction on granting of unsecured loans to directors and employees of insurer

30A.—(1) No registered insurer shall in respect of its business in Singapore grant, whether directly or indirectly, unsecured loans —

(a)	to a director of the insurer which in the aggregate and outstanding at any one time exceed the sum of $5,000; or
(b)	to an employee of the insurer which in the aggregate and outstanding at any time exceed one year’s emolument of that employee.

(2) For the purpose of this section, “director” includes the wife, husband, father, mother, son or daughter of a director.”.

Amendment of section 32

10. Section 32 of the Insurance Act is amended by deleting subsection (5) and substituting the following subsection:

“(5) For the purpose of subsection (3), “risks outside Singapore” means any risk which would be classified as an offshore policy as defined in the First Schedule had the risk been underwritten by a registered insurer in Singapore.”.

New section 32A

11. The Insurance Act is amended by inserting, immediately after section 32, the following section:

“Inspection and investigation of affairs of insurance agents and brokers

32A.—(1) The Authority may, for the purpose of performing its functions under this Act, inspect the books, accounts and other documents of any Singapore insurance agent or Singapore insurance broker and may institute an investigation into the whole or any part of the insurance business carried on in Singapore by the agent or broker and may for this purpose enter any premises at all reasonable times.

(2) Section 40(3) shall apply, mutatis mutandis, in relation to any Singapore insurance agent or Singapore insurance broker to which this section applies.

(3) Any person who refuses or fails when required to do so under section 40(3), as made applicable by subsection (2), to produce any document in his custody shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and, in the case of a continuing offence, to a further fine of $1,000 for every day during which the offence continues after conviction.

(4) This section shall not apply to any financial institution licensed under the Monetary Authority of Singapore Act (Cap. 186), Banking Act (Cap. 19), Finance Companies Act (Cap. 108), Securities Industry Act (Cap. 289) or Futures Trading Act (Cap. 116) and such other person as may be prescribed.”.

Amendment of section 34

12. Section 34 of the Insurance Act is amended —

(a)

by deleting subsections (6), (7) and (8) and substituting the following subsections:

“(6) This section shall not authorise a person to carry on business as a Singapore insurance agent for any individual, or in the course of a business as Singapore insurance broker to negotiate insurances with any individual, except under the authority of a licence issued by the Authority or in respect of any risk for which the broker has been permitted under section 32 to negotiate with any insurer.

(7) Any person who desires to obtain a licence under subsection (6) shall apply to the Authority in writing and shall furnish such information as the Authority may require.”; and

(b)

by deleting paragraph (c\) of subsection (10) and substituting the following paragraph:

“(c)	the agent or broker has failed to maintain the minimum financial solvency requirement as specified by the Authority in its licence;”.

Amendment of section 36

13. Section 36(2) of the Insurance Act is amended by inserting, immediately after the word “kept” in the first line, the words “in Singapore”.

Amendment of section 37

14. Section 37(1) of the Insurance Act is amended by deleting the words “a qualified actuary” in the third and fourth lines and substituting the words “an actuary”.

Amendment of section 40

15. Section 40 of the Insurance Act is amended —

(a)

by deleting subsections (2) and (4); and

(b)

by deleting subsection (5) and substituting the following subsection:

“(5) Any person who refuses or fails when required to do so under subsection (3) to produce any document in his custody shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 and, in the case of a continuing offence, to a further fine of $1,000 for every day during which the offence continues after conviction.”.

Amendment of section 48

16. Section 48(2) of the Insurance Act is amended by deleting the words “a qualified actuary” and substituting the words “an actuary”.

Amendment of section 49

17. Section 49(1) of the Insurance Act is amended by deleting the word “and” at the end of paragraph (c), and by inserting immediately thereafter the following paragraph:

“(ca)

a statement from an auditor of the transferee who satisfies the conditions mentioned in section 36(4)(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”.

Amendment of section 52

18. Section 52(1) of the Insurance Act is amended by deleting the word “April” and substituting the word “June”.

Amendment of section 55

19. Section 55 of the Insurance Act is amended —

(a)

by deleting “34 (6),” in subsection (1)(a);

(b)

by inserting, immediately after the word “Act” in the second line of subsection (2), the following words:

“or any regulations made thereunder or any direction issued by the Authority under section 62(2)”; and

(c)

by inserting, immediately after the word “Act” in the first line of subsection (4), the words “or any regulations made thereunder”.

Amendment of section 62

20. The Insurance Act is amended by renumbering section 62 as subsection (1) of that section, and by inserting immediately thereafter the following subsection:

“(2) The Authority may issue such directions as it considers necessary for carrying into effect the objects of this Act, and in this Act “directions” includes notices and circulars.”.

Repeal of section 63

21. Section 63 of the Insurance Act is repealed.

Amendment of section 64

22. Section 64(1) of the Insurance Act is amended —

(a)

by inserting, immediately before the definition of “Authority”, the following definitions:

“ “accounting period”, in relation to any insurer, means the period beginning from the commencement of its business in Singapore or 1st January of any year, as the case may be, and ending on 31st December of that year for which accounts relating to the insurance business carried on by the insurer in Singapore are kept and for which an insurance fund has been established under this Act, unless otherwise allowed by the Authority;

“actuary” means a Fellow of any prescribed institute;”; and

(b)

by deleting the definition of “qualified actuary”.

Amendment of Second Schedule

23. The Second Schedule to the Insurance Act is amended by inserting, immediately after “$500,000” in paragraph 1, the words “or such other amount as may be prescribed”.

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