No. S 496
Insurance Act
(Chapter 142)
Insurance (General Provisions) (Amendment) Regulations 2004
In exercise of the powers conferred by sections 42 (4), 60(1) and (3) and 64(1) of the Insurance Act, the Monetary Authority of Singapore hereby makes the following Regulations:
Citation and commencement
1.  These Regulations may be cited as the Insurance (General Provisions) (Amendment) Regulations 2004 and shall come into operation on 23rd August 2004.
New regulations 9, 10 and 11 and Schedule
2.  The Insurance (General Provisions) Regulations 2003 (G.N. No. S 684/2003) are amended by inserting, immediately after regulation 8, the following regulations and Schedule:
“Determination of liabilities in connection with winding up
9.—(1)  This regulation shall apply to any registered insurer or Singapore insurer which has ceased to be so registered but remains under any liability in respect of Singapore policies or offshore policies.
(2)  For the purposes of section 42(4) of the Act, in proceedings under the Companies Act (Cap. 50) —
(a)in the case of a winding up of the affairs of an insurer to which this regulation applies by the court, in determining whether the insurer is unable to pay its debts, any liability of the insurer in respect of policies; and
(b)in the case of a winding up of the affairs of an insurer to which this regulation applies, any liability of the insurer in respect of Singapore policies or offshore policies which is required to be valued,
shall be determined in the manner as set out in Part V of the Insurance (Valuation and Capital) Regulations 2004 (G.N. No. S 498/2004).
Surrender values of life policies
10.—(1)  Where a policy owner surrenders a life policy under section 60(1) of the Act, the surrender value of the life policy shall be at least —
(a)in the case of a policy issued before 23rd August 2004 —
(i)where the policy is an endowment policy, an amount equal to 80% of the liabilities of the registered insurer in respect of that policy determined in accordance with paragraph (2); or
(ii)where the policy is a whole life policy, an amount equal to 95% of the liabilities of the registered insurer in respect of that policy determined in accordance with paragraph (2),
less any moneys due under the policy to the insurer; or
(b)in the case of a policy issued on or after 23rd August 2004, the amount that the insurer is contractually liable for on the surrender of the policy,
at the date of the surrender.
(2)  For the purposes of paragraph (1)(a), the liabilities of a registered insurer shall be determined by the net premium valuation method using —
(a)in the case of any policy introduced before 1st January 1994 —
(i)the A1924-29 Ultimate Mortality Table set out in Table 1 of the Schedule for both male and female lives; and
(ii)an interest rate of 4% per annum; and
(b)in the case of any policy introduced on or after 1st January 1994 —
(i)the 1992 Commissioner’s Valuation Table set out in Table 2 of the Schedule; and
(ii)an interest rate of 4% per annum.
(3)  In this regulation —
“adjusted value of premiums payable after the valuation date” means the actual value of premiums adjusted —
(a)by assuming that the policy provides only for such premiums as are sufficient to provide for the risk incurred by the insurer in issuing it, without provision for any other outgoings such as bonuses and office expenses; and
(b)where the premiums are payable for a whole life policy or an endowment policy (with or without other benefits), by making whichever of the following further adjustments that will produce a lower adjusted value:
(i)to assume that the policy is issued one year after the actual date of its issue (but without thereby postponing the time when the premiums cease or any policy moneys become payable if that time is fixed by reference to the date of issue) and to calculate the premiums referred to in paragraph (a) accordingly;
(ii)to add to the premiums referred to in paragraph (a), such amount as would have at the date of issue of the policy resulted in a capitalised value equal to 3% of the policy moneys (taking the value of any annuity as the capitalised value the annuity would have on becoming payable);
“net premium valuation method” means a valuation method where the liability in respect of a policy shall be taken as equal to the amount (if any) by which the value, as at the date on which the assets ane liabilities of a registered insurer are valued (referred to in this regulation as valuation date), of policy moneys which would be paid out under the policy, according to the contingencies on which they are payable, exceeds the adjusted value of premiums payable on or after the valuation date (if any), according to the contingencies upon which they are respectively payable.
Amount of paid-up policy to be obtained in exchange for life policy
11.—(1)  Where a policy owner exchanges a life policy issued before 23rd August 2004 under section 60(3) of the Act for a paid-up policy, the paid-up policy shall be for the amount determined, as at the date of exchange, by the following formula:
 
A
 
 
B
 
where
A
is the surrender value in dollars of the policy exchanged, less any sums due under the policy to the insurer; and
 
B
is the value of the liabilities of the insurer in respect of a paid-up policy for one dollar payable on the like contingencies as the policy moneys under the policy exchanged.
(2)  A registered insurer shall calculate the surrender value referred to in the formula in paragraph (1) in the manner specified under regulation 10(1) and the liabilities referred to in the formula shall be valued on the basis set out in regulation 10(2).
THE SCHEDULE
Regulation 10(2)
Table 1 — A1924-29 Ultimate Mortality Table
First column
 
Second column
Age (rounded to the nearest year)
 
Mortality rate
0
 
0.00913
1
 
0.00913
2
 
0.00227
3
 
0.00196
4
 
0.00188
5
 
0.00180
6
 
0.00174
7
 
0.00168
8
 
0.00162
9
 
0.00159
10
 
0.00156
11
 
0.00166
12
 
0.00176
13
 
0.00186
14
 
0.00196
15
 
0.00206
16
 
0.00216
17
 
0.00225
18
 
0.00231
19
 
0.00234
20
 
0.00235
21
 
0.00235
22
 
0.00235
23
 
0.00235
24
 
0.00235
25
 
0.00235
26
 
0.00235
27
 
0.00235
28
 
0.00236
29
 
0.00238
30
 
0.00241
31
 
0.00246
32
 
0.00253
33
 
0.00262
34
 
0.00273
35
 
0.00286
36
 
0.00302
37
 
0.00320
38
 
0.00341
39
 
0.00364
40
 
0.00388
41
 
0.00413
42
 
0.00439
43
 
0.00466
44
 
0.00495
45
 
0.00527
46
 
0.00563
47
 
0.00604
48
 
0.00651
49
 
0.00704
50
 
0.00764
51
 
0.00831
52
 
0.00906
53
 
0.00990
54
 
0.01084
55
 
0.01190
56
 
0.01311
57
 
0.01450
58
 
0.01608
59
 
0.01783
60
 
0.01973
61
 
0.02176
62
 
0.02394
63
 
0.02631
64
 
0.02893
65
 
0.03188
66
 
0.03524
67
 
0.03908
68
 
0.04338
69
 
0.04812
70
 
0.05327
71
 
0.05881
72
 
0.06473
73
 
0.07104
74
 
0.07777
75
 
0.08497
76
 
0.09268
77
 
0.10093
78
 
0.10974
79
 
0.11913
80
 
0.12910
81
 
0.13962
82
 
0.15066
83
 
0.16221
84
 
0.17425
85
 
0.18676
86
 
0.19973
87
 
0.21315
88
 
0.22702
89
 
0.24134
90
 
0.25611
91
 
0.27133
92
 
0.28700
93
 
0.30312
94
 
0.31970
95
 
0.33675
96
 
0.35428
97
 
0.37231
98
 
0.39086
99
 
0.40995
100
 
0.42960
101
 
0.44893
102
 
0.47066
103
 
0.49211
104
 
0.51420
105
 
0.53695
106
 
0.56038
107
 
0.58451
108
 
0.60936
109
 
0.63495
110
 
0.66130
111
 
0.68843
112
 
0.71636
113
 
0.74511
114
 
0.77470
115
 
0.80515
116
 
0.83648
117
 
0.86871
118
 
0.90186
119
 
0.93595
120
 
1.00000
Table 2 — 1992 Commissioner’s Valuation Table
First column
 
Second column
 
Third column
Age (rounded to the nearest year)
 
Male mortality rate
 
Female mortality rate
0
 
0.00081
 
0.00081
1
 
0.00081
 
0.00081
2
 
0.00075
 
0.00081
3
 
0.00069
 
0.00081
4
 
0.00063
 
0.00081
5
 
0.00058
 
0.00075
6
 
0.00054
 
0.00069
7
 
0.00050
 
0.00063
8
 
0.00048
 
0.00058
9
 
0.00045
 
0.00054
10
 
0.00044
 
0.00050
11
 
0.00047
 
0.00048
12
 
0.00057
 
0.00045
13
 
0.00067
 
0.00044
14
 
0.00076
 
0.00047
15
 
0.00085
 
0.00057
16
 
0.00092
 
0.00067
17
 
0.00099
 
0.00076
18
 
0.00104
 
0.00085
19
 
0.00109
 
0.00092
20
 
0.00113
 
0.00099
21
 
0.00116
 
0.00104
22
 
0.00115
 
0.00109
23
 
0.00109
 
0.00113
24
 
0.00109
 
0.00116
25
 
0.00108
 
0.00115
26
 
0.00108
 
0.00109
27
 
0.00107
 
0.00109
28
 
0.00108
 
0.00108
29
 
0.00108
 
0.00108
30
 
0.00109
 
0.00107
31
 
0.00112
 
0.00108
32
 
0.00115
 
0.00108
33
 
0.00119
 
0.00109
34
 
0.00125
 
0.00112
35
 
0.00136
 
0.00115
36
 
0.00149
 
0.00119
37
 
0.00167
 
0.00125
38
 
0.00184
 
0.00136
39
 
0.00202
 
0.00149
40
 
0.00220
 
0.00167
41
 
0.00236
 
0.00184
42
 
0.00250
 
0.00202
43
 
0.00264
 
0.00220
44
 
0.00279
 
0.00236
45
 
0.00296
 
0.00250
46
 
0.00316
 
0.00264
47
 
0.00343
 
0.00279
48
 
0.00380
 
0.00296
49
 
0.00423
 
0.00316
50
 
0.00475
 
0.00343
51
 
0.00540
 
0.00380
52
 
0.00620
 
0.00423
53
 
0.00709
 
0.00475
54
 
0.00805
 
0.00540
55
 
0.00903
 
0.00620
56
 
0.01003
 
0.00709
57
 
0.01106
 
0.00805
58
 
0.01212
 
0.00903
59
 
0.01320
 
0.01003
60
 
0.01430
 
0.01106
61
 
0.01555
 
0.01212
62
 
0.01693
 
0.01320
63
 
0.01831
 
0.01430
64
 
0.01989
 
0.01555
65
 
0.02169
 
0.01693
66
 
0.02378
 
0.01831
67
 
0.02622
 
0.01989
68
 
0.02900
 
0.02169
69
 
0.03214
 
0.02378
70
 
0.03562
 
0.02622
71
 
0.03937
 
0.02900
72
 
0.04335
 
0.03214
73
 
0.04757
 
0.03562
74
 
0.05204
 
0.03937
75
 
0.05684
 
0.04335
76
 
0.06202
 
0.04757
77
 
0.06766
 
0.05204
78
 
0.07377
 
0.05684
79
 
0.08041
 
0.06202
80
 
0.08756
 
0.06766
81
 
0.09529
 
0.07377
82
 
0.10360
 
0.08041
83
 
0.11253
 
0.08756
84
 
0.12211
 
0.09529
85
 
0.13125
 
0.10360
86
 
0.14007
 
0.11253
87
 
0.15020
 
0.12211
88
 
0.16339
 
0.13125
89
 
0.18134
 
0.14007
90
 
0.20580
 
0.15020
91
 
0.23848
 
0.16339
92
 
0.28111
 
0.18134
93
 
0.33541
 
0.20580
94
 
0.40312
 
0.23848
95
 
0.48595
 
0.28111
96
 
0.58563
 
0.33541
97
 
0.70389
 
0.40312
98
 
0.84246
 
0.48595
99
 
1.00000
 
0.58563
100
 
1.00000
 
0.70389
101
 
1.00000
 
0.84246
102
 
1.00000
 
1.00000
Savings and transitional provisions
3.—(1)  Notwithstanding regulation 2, any registered insurer which carried on insurance business immediately before 23rd August 2004 shall, for the period from 23rd August 2004 to 31st December 2004 (both dates inclusive) (referred to in this regulation as the relevant period), determine its liabilities for the purposes of section 42(4) of the Act in accordance with regulation 25 of the Insurance Regulations (Rg 1) in force immediately before 23rd August 2004.
(2)  Notwithstanding paragraph (1), a registered insurer may elect to determine its liabilities for the purposes of section 42(4) of the Act in accordance with regulation 9 of the Insurance (General Provisions) Regulations 2003 (G.N. No. S 684/2003) (as inserted by these Regulations) at any time before the expiry of the relevant period.
(3)  Where a registered insurer elects under paragraph (2) to determine its liabilities in accordance with regulation 9 of the Insurance (General Provisions) Regulations 2003 (as inserted by these Regulations), the insurer shall give notice in writing to the Authority of the date from which it elects to do so no later than 14 days after that date, and paragraph (1) shall not apply to the insurer from the date the election is made.”.
Made this 23rd day of August 2004.
KOH YONG GUAN
Managing Director,
Monetary Authority of Singapore.
[ID 05.1 V.31; AG/LEG/SL/142/2002/1 Vol. 5]
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