Insurance (Amendment) Bill

Bill No. 17/1973

Read the first time on 7th March 1973.

An Act to amend the Insurance Act (Chapter 193 of the 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, 1973, and shall come into operation on such date as the Minister may, by notification in the Gazette, appoint.

New sections 3A, 3B and 3C

2. The Insurance Act is hereby amended by inserting immediately after section 3 thereof the following sections: —

“Holding out as registered insurer

3A. Where any company or firm holds itself out to be a registered insurer in respect of life business or general business or both when it is not registered under this Act in respect of that business, the company or firm shall be guilty of an offence under this Act and every director, manager or officer of the company and the proprietor or every partner or officer of the firm shall, unless he proves that the holding out by the company or firm was made without his knowledge or consent, be guilty of an offence under this Act and shall be liable on conviction to a fine of five thousand dollars or to imprisonment for a term of twelve months or to both such fine and imprisonment, and to a further fine of one thousand dollars for every day during which the offence is continued after conviction.

Use of word “insurance”

3B.—(1) No person other than an insurer registered under this Act shall, without the written consent of the Commissioner, use the word “insurance” or any of its derivatives in any language, or any other word indicating that such person carries on insurance business in the name, description or title under which it carries on business in Singapore or make any representation to such effect in any bill head, letter paper, notice, advertisement or in any other manner:

Provided that nothing in this section shall prohibit an association of insurers from using the word “insurance” or any of its derivatives in any language as part of its name or description of its activities.

(2) Any person who contravenes the provisions of subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of one thousand dollars or to imprisonment for a term of six months or to both such fine and imprisonment and to a further fine of one hundred dollars for every day during which the offence is continued after conviction.

Examination of persons suspected of carrying on insurance business

3C.—(1) Whenever the Commissioner has reason to believe that a person is carrying on insurance business without having been registered under this Act, he may call for or inspect the books, accounts and records of that person in order to ascertain whether or not that person has contravened or is contravening any provisions of this Act.

(2) Any person who wilfully refuses to submit such books, accounts and records or to allow the inspection thereof shall be guilty of an offence under this Act and shall be liable on conviction to a fine of five thousand dollars or to imprisonment for a term of twelve months, or to both such fine and imprisonment and to a further fine of one thousand dollars for every day during which the offence is continued after conviction.”.

Amendment of section 4

3. Section 4 of the Insurance Act is hereby amended —

(a)

by inserting immediately after the word “register” appearing in the fifth line of subsection (1) thereof the expression “, with or without conditions and on payment of the prescribed fees,”; and

(b)

by inserting immediately after subsection (5) thereof the following subsection: —

“(5A) Any applicant believing itself to be aggrieved by an order of the Commissioner refusing its application in respect of life business or general business or both may, within one month of being notified of the refusal by the Commissioner, appeal against the order to the Minister whose decision thereon shall be final.”.

Repeal and re-enactment of section 5

4. Section 5 of the Insurance Act is hereby repealed and the following substituted therefor: —

“Conditions of registration

5.—(1) The Commissioner may at any time add to, vary or revoke any existing conditions of registration of an insurer or impose any conditions thereto.

(2) Any insurer which fails to comply with any of the conditions imposed by the Commissioner under subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of five thousand dollars and to a further fine of one thousand dollars for every day during which the offence is continued after conviction.”.

New section 5A

5. The Insurance Act is hereby amended by inserting immediately after section 5 thereof the following section: —

“Renewal of registration and renewal fees

5A.—(1) Every insurer in Singapore shall renew its registration annually before such date as may be prescribed and shall pay, in respect of the class of business for which it is registered, the prescribed fees.

(2) The Minister may prescribe different fees in respect of different classes of insurance business.

(3) The Minister may exempt an insurer from payment of the prescribed fees or part thereof.”.

Repeal and re-enactment of section 6

6. Section 6 of the Insurance Act is hereby repealed and the following substituted therefor: —

“Cancellation of registration

6.—(1) The Commissioner may by order cancel the registration of an insurer either wholly or in respect of a class of business, as the case may be, if he is satisfied that —

(a)	the insurer has not commenced business within twelve months after being registered;
(b)	the insurer has ceased to carry on insurance business in respect of any class of business;
(c)	the insurer has failed to maintain a surplus of assets over liabilities of not less than an amount as specified under paragraph (a) of subsection (4) of section 4 of this Act;
(d)	the insurer has neglected or refused to observe an order of the Commissioner to make good any deficiency, whenever its insurance fund shall have become impaired;
(e)	the insurer proposes to make, or has made, any composition or arrangement with its creditors or has gone into liquidation or has been wound up or otherwise dissolved;
(f)	the insurer is carrying on its business in a manner likely to be detrimental to the interests of its policy owners;
(g)	the insurer is unable to meet its obligations;
(h)	the insurer has failed to effect satisfactory reinsurance arrangements;
(i)	the insurer is contravening or has contravened the provisions of this Act or any of the regulations made thereunder or any condition imposed or any direction given by the Commissioner under this Act;
(j)	the insurer has been convicted of any offence under this Act or any of its officers holding a managerial or an executive position has been convicted of any offence under this Act;
(k)	the insurer has furnished false, misleading or inaccurate information, or has concealed or failed to disclose material facts in its application for registration; or
(l)	it is in the public interest to cancel the registration.

(2) The Commissioner shall before cancelling any registration under the provisions of subsection (1) of this section cause to be given to the insurer concerned notice in writing of his intention to do so, specifying a date, not less than fourteen days after the date of the notice, upon which the cancellation will take effect and calling upon the insurer to show cause to the Commissioner why the registration should not be cancelled.

(3) Notwithstanding the fact that the registration of an insurer has been cancelled under this section, so long as the insurer remains under any liability in respect of Singapore policies belonging to the class of insurance business to which the registration relates, the insurer shall take such action as it considers necessary or as may be required by the Commissioner to satisfy him that reasonable provision has been or will be made for that liability and that adequate arrangements exist or will exist for payment in Singapore of premiums and claims on those policies.

(4) When the Commissioner has cancelled a registration under the provisions of subsection (1) of this section he shall forthwith inform the insurer of the cancellation.

(5) Any insurer whose registration has been cancelled pursuant to the provisions of this section shall have a right of appeal against the order of cancellation to the Minister whose decision thereon shall be final.

(6) An order of cancellation made by the Commissioner shall not take effect until the expiration of a period of fourteen days after the Commissioner has informed the insurer of the order.”.

New section 6A

7. The Insurance Act is hereby amended by inserting immediately after section 6 thereof the following section: —

“Effects of cancellation of registration

6A.—(1) Where an order of cancellation becomes effective under section 6 of this Act —

(a)

notice of the cancellation shall be published in the Gazette; and

(b)

the insurer shall, as from the date of cancellation, cease to carry on in Singapore insurance business of the class in respect of which its registration has been cancelled under this Act, otherwise than by the collection or receipt of premiums on Singapore policies belonging to that class effected before the date of cancellation of registration and subsection (2) of section 3 of this Act shall not apply to the insurer in respect of the collection or receipt of those premiums.

(2) The provisions of paragraph (b) of subsection (1) of this section shall not prejudice the enforcement by any policy owner or person of any right or claim against the insurer or by the insurer of any right or claim against any policy owner or person.”.

Amendment of section 20

8. Section 20 of the Insurance Act is hereby amended —

(a)

by deleting subsection (8) thereof and substituting therefor the following: —

“(8) The Commissioner shall not be required to consider an application for a licence under subsection (6) of this section unless he is satisfied —

(a)	that the person applying for a licence to carry on business as a Singapore insurance agent for any individual has a surplus of assets over liabilities of not less than one hundred thousand dollars or such greater amount as may be prescribed; and
(b)	that the person applying for a licence to carry on business as Singapore insurance broker in negotiating insurances with any individual has furnished a certificate of solvency signed by the applicant’s auditor and has a professional indemnity insurance policy of a value of not less than five hundred thousand dollars or such greater amount as the Commissioner may specify.

(9) In granting a licence under subsection (6) of this section the Commissioner may impose such conditions as he thinks fit and may at any time add to, vary or revoke such conditions.

(10) Any person in Singapore who carries on business as a Singapore insurance agent for any individual or as a Singapore insurance broker in negotiating insurances with any individual without a valid licence under subsection (6) of this section or who fails to comply with any of the conditions of his licence shall be guilty of an offence under this Act and shall be liable on conviction to a fine of five thousand dollars or to imprisonment for a term of twelve months, or to both such fine and imprisonment and to a further fine of one thousand dollars for every day during which the offence is continued after conviction.

(11) Every licence under subsection (6) of this section shall expire on the 31st day of December of each year and shall be issued on payment of the prescribed fees.

(12) The Minister may prescribe different licence fees for Singapore insurance agents and Singapore insurance brokers.”; and

(b)

by renumbering subsection (9) thereof as subsection (13).

Amendment of section 27

9. Section 27 of the Insurance Act is hereby amended —

(a)

by deleting the expression “Subject to subsection (2) of this section, the” appearing in the first line of subsection (1) thereof and substituting therefor the word “The”; and

(b)

by deleting subsections (2) and (3) thereof and substituting therefor the following: —

“(2) The Commissioner may himself make the investigation or may appoint an inspector to make it and report the results of the investigation to him.

(3) The Commissioner may appoint an auditor, other than the auditor appointed by the insurer under section 22 of this Act, to be an inspector to carry out the investigation under this section and the costs and expenses of such an investigation shall be paid by the insurer.”.

Repeal and re-enactment of section 28

10. Section 28 of the Insurance Act is hereby repealed and the following substituted therefor: —

“Powers of Commissioner to issue directions

28.—(1) Where the Commissioner is satisfied that the affairs of any insurer are being conducted in a manner likely to be detrimental to the public interest or the interests of the policy owners or prejudicial to the interests of the insurer, the Commissioner may issue such directions to the insurer as he considers necessary and in particular may require the insurer —

(a)	to take such action or recruit such management personnel as may be necessary to enable it to conduct its business in accordance with sound insurance principles;
(b)	to remove any of its directors or any person whom the Commissioner considers unfit to be associated with it;
(c)	to take action as to the disposition or recovery of its assets;
(d)	to take any available steps for the recovery by the insurer of sums appearing to the Commissioner to have been illegally or improperly paid;
(e)	to stop renewing and or issuing further policies of the class of business to which the direction relates; or
(f)	to make such arrangements with respect to reinsurance as the Commissioner so specifies.

(2) The Commissioner may, upon representation being made to him, or on his own motion, modify or cancel any direction issued under subsection (1) of this section and, in so doing, may impose such conditions as he thinks fit.

(3) Any insurer which fails to comply with any direction made under subsection (1) of this section shall be guilty of an offence under this Act and shall be liable on conviction to a fine of five thousand dollars or to imprisonment for a term of six months or to both such fine and imprisonment and to a further fine of one thousand dollars for every day during which the offence is continued after conviction.”.

Amendment of section 30

11. Section 30 of the Insurance Act is hereby amended by deleting the expression “subsection (2) of section 28 of this Act” appearing in subsection (1) thereof and substituting therefor the expression “paragraph (e) of subsection (1) of section 28 of this Act by reason of the insolvency of the fund maintained by the insurer under this Act for either class of insurance business”.

Amendment of section 44

12. Subsections (1), (2), (3) and (4) of section 44 of the Insurance Act are hereby deleted and the following substituted therefor: —

“(1) In any case where the policy owner of any life policy or life policies of an insurer dies, and the policy moneys are payable thereunder on his death, the insurer may make payment to a proper claimant not exceeding in the aggregate nine-tenths of the policy moneys of all such policies issued by the insurer on the deceased’s life or ten thousand dollars whichever is the lesser without the production of any probate or letters of administration; and the insurer shall be discharged from all liability in respect of the sum paid.

(2) If, in any case as is mentioned in subsection (1) of this section, estate duty is leviable in Singapore on any such policy moneys as are there mentioned, the insurer may, notwithstanding subsection (2) of section 40 of the Estate Duty Act (Cap. 137), pay to a proper claimant a sum not exceeding in the aggregate nine-tenths of the policy moneys of all such policies issued by the insurer on the deceased’s life or ten thousand dollars whichever is the lesser, without the policy moneys having been included in such a schedule or certificate as is mentioned in the said subsection (2):

Provided that before making any payment under this subsection the insurer shall give not less than fourteen days’ written notice by registered post to the Commissioner of Estate Duties with such particulars as he may require.

(3) Subsection (2) of this section shall apply in relation to policy moneys under policies of which the deceased was not the policy owner at his death as it applies in relation to any such policy moneys as are mentioned in subsection (1) of this section.

(4) Where a sum is paid under subsection (2) of this section on account of any policy moneys and the policy moneys are not within twelve months thereafter included in such a schedule or certificate as is there referred to, then the insurer shall deposit the balance with the Accountant-General; but before refunding such balance to the insurer on its application to pay to the persons entitled thereto, the Accountant-General may apply the whole or part of the sum deposited in paying any unpaid estate duty leviable on the death.”.

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