Insurance (Investment-linked Life Insurance) Regulations

Insurance Act

(Chapter 142, Section 62)

Rg 4

G.N. No. S 496/1993

REVISED EDITION 1994

(10th December 1993)

[10th December 1993]

Citation

1. These Regulations may be cited as the Insurance (Investment-Linked Life Insurance) Regulations.

Definitions

2. In these Regulations —

“fund” means any separate fund established in respect of investment-linked life insurance policies under regulation 5;

“investment-linked life insurance policy” means any individual policy which provides for life insurance where the policy value at any time varies according to the value of the underlying assets at the time.

Application

3. These Regulations shall apply to any insurer which has been authorised by the Authority to issue investment-linked life insurance policies.

Approval of Authority

4. No insurer shall issue any investment-linked life insurance policy unless the insurer has obtained the written approval of the Authority for the issuance of such policy.

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Separate funds

5.—(1) Any insurer issuing investment-linked life insurance policies shall establish and maintain one or more separate funds pursuant to section 16 (2)of the Act.

(2) The assets of any such fund shall be kept separate from all other assets of the insurer.

(3) The insurer shall maintain in each such fund adequate assets to meet the liabilities of that fund.

Valuation of assets

6.—(1) The assets of any fund shall be valued at market rate at least once a month except that immovable property may be valued quarterly.

(2) The value of each of the following assets shall be determined for an amount not exceeding the net realisable value of the assets:

(a)	unquoted shares;
(b)	unquoted corporate bonds; and
(c)	equity shares and corporate bonds that have been suspended by any stock exchange from trading in excess of 10 consecutive trading days at the date for which the value is to be determined.

Exemption from investment limits

7.—(1) Any fund established under regulation 5 shall be exempted from Parts III and IV of the Insurance Regulations.

[Rg 1.]

(2) Notwithstanding paragraph (1), the assets of each of the funds established shall be subject to the following investment limits:

(a)	the value of investment in loans to and securities of any one company or group of companies related to one another shall not exceed 10% of the value of the assets in the fund; and
(b)	the value of deposits placed with any one approved financial institution or group of approved financial institutions related to one another shall not exceed 15% of the value of the assets in the fund.

(3) For the purposes of this regulation —

“approved financial institution” means any bank, finance company or merchant bank approved by the Authority or any commercial bank licensed in a foreign country;

“related”, in relation to any company or financial institution, has the same meaning as in section 6 of the Companies Act [Cap. 50].

Fund margin of solvency

8. For the purposes of section 17(1)(a) of the Act, regulation 3(2)(a)(i) of the Insurance Regulations shall not apply to any fund in the calculation of the fund margin of solvency.

[Rg 1.]

Valuation of liabilities

9.—(1) The mortality and interest assumptions used to determine the liabilities of an insurer in respect of its investment-linked life insurance policies shall be in accordance with Part V of the Insurance Regulations.

[S 679/2003 wef 01/01/2004]

(2) The method of calculation under paragraph (1) shall be determined by the insurer’s actuary subject to the Authority’s approval.

(3) The liabilities of an insurer in respect of its investment-linked life insurance policies shall not be less than the amount needed to meet the cash values, the death claims and the administrative expenses relating to such policies.

[S 679/2003 wef 01/01/2004]

(4) The assets needed to meet the liabilities of an insurer in respect of the death claims or the administrative expenses of its investment-linked life insurance policies may be aggregated and maintained in any life fund established by the insurer. Mortality and expense charges may be deducted from the investment-linked life insurance policies and paid into the life fund for this purpose.

[S 679/2003 wef 01/01/2004]

(5) For the purposes of paragraph (4), “life fund” means an insurance fund established by an insurer under the Act in respect of the insurer’s life business, including any fund established under regulation 5.

(6) The actuary of an insurer shall ensure that the liabilities of the insurer in respect of its investment-linked life insurance policies are adequate at any particular time. The actuary shall increase such liabilities to cover any contingencies or guarantees relating to such policies whenever he considers necessary.

[S 679/2003 wef 01/01/2004]

Business plan

10. An insurer shall, before issuing any investment-linked life insurance policy, furnish the Authority with such information as may be specified in the notice issued by the Authority to insurers for the purposes of these Regulations.

[S 679/2003 wef 01/01/2004]

Disclosure of information to applicants

11.—(1) An insurer shall deliver to an applicant of any investment-linked life insurance policy, adequate and accurate information about the policy.

[S 679/2003 wef 01/01/2004]

(2) All sales materials used by any agent of an insurer to market any investment-linked life insurance policy must be approved by the insurer and shall not include any statement, promise or forecast which the insurer knows to contain any concealment of material facts.

[S 679/2003 wef 01/01/2004]

(3) All sales materials and policy forms shall include such information as the Authority may specify.

Periodic disclosure to policy owners

12.—(1) Every investment-linked life insurance policy issued by an insurer shall provide that the policy owners will be sent, within 30 days after each anniversary of the policy or a specified date in each policy year, a statement for the purpose of keeping the policy owners advised on the performance and value of their policies.

[S 679/2003 wef 01/01/2004]

(2) All policy owners shall be entitled to receive from the insurer an annual report on the performance of each of the funds within 60 days from the date to which the report relates.

(3) A copy of the report under paragraph (2) shall be submitted to the Authority.

(4) The statements and reports mentioned in paragraphs (1) and (2) shall include such information as the Authority may specify.

Age limit

13. No insurer shall issue any investment-linked life insurance policy to any person below the age of 18 years.

[S 679/2003 wef 01/01/2004]

Free-look

14.—(1) A policy owner shall have 14 days from the date of receipt of the policy by him to examine the terms and conditions of the policy.

(2) A policy owner may terminate the policy within the 14-day period referred to in paragraph (1).

(3) Where a policy is terminated under paragraph (2) —

(a)	any sum which the policy owner has paid in connection with the policy (whether by way of premium or otherwise and whether to the insurer or his agent for the purpose of receiving that sum) shalbe recoverable from the insurer by the policy owner; and
(b)	any expenses incurred by the insurer in underwriting the policy shall be recoverable by the insurer from the policy owner.

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