Insurance (Valuation and Capital) Regulations 2004

No. S 498

Insurance Act

(Chapter 142)

Insurance (Valuation and Capital) Regulations 2004

In exercise of the powers conferred by sections 9(1)(c), 17, 18 and 64(1) of the Insurance Act, the Monetary Authority of Singapore hereby makes the following Regulations:

PART I

PRELIMINARY

Citation and commencement

1. These Regulations may be cited as the Insurance (Valuation and Capital) Regulations 2004 and shall come into operation on 23rd August 2004.

Definitions

2.—(1) In these Regulations, unless the context otherwise requires —

“Accounting Standards” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

“appointed actuary” means the actuary appointed by a direct insurer under section 31 of the Act;

“appointed day” means the date of commencement of these Regulations;

“associates” has the same meaning as in section 27(4)(d) of the Act;

“collective investment scheme” has the same meaning as in section 2(1) of the Securities and Futures Act (Cap. 289);

“commodity”, in relation to a forward contract or futures contract, means —

(a)	a financial instrument; or
(b)	gold, any class of oil or any other physical commodity;

“counterparty” means any person who is under a financial obligation to the insurer;

“debt security” includes any debenture, bond or note;

“derivative” includes any warrant, convertible security, forward contract, futures contract, swap, contract for differences or option;

“equity security” includes any stock, share, depository receipt or unit in a collective investment scheme;

“financial resources” has the meaning set out in paragraph 1 of the First Schedule;

“forward contract” means a contract the effect of which is that one party to the contract agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party to the contract at a specified future time and at a specified price payable at that time, and includes an option on a forward contract but does not include a futures contract;

“futures contract” means a contract the effect of which is that —

(a)

one party to the contract agrees to deliver a specified commodity, or a specified quantity of a specified commodity, to another party to the contract at a specified future time and at a specified price payable at that time under the terms and conditions set out in the business rules and practices of the futures exchange, recognised trading system provider or overseas futures exchange at which the contract is made; or

(b)

the parties to the contract will discharge their obligations under the contract by settling the difference between the value of a specified quantity of a specified commodity agreed at the time of the making of the contract and at a specified future time, such difference being determined in accordance with the business rules and practices of the futures exchange, recognised trading system provider or overseas futures exchange at which the contract is made, and includes an option on a futures contract;

“government debt security” means a debt security which —

(a)	is issued or fully guaranteed by the Government;
(b)	is issued or fully guaranteed by a central government or central bank of a country or territory which has a sovereign rating of investment grade; or
(c)	is issued or fully guaranteed by a central government or central bank of a country or territory which does not have a sovereign rating of investment grade, is denominated in the national currency of that country, and has a residual maturity of 12 months or less;

“investment-linked fund” means an insurance fund for investment-linked policies established and maintained under section 17(1A) of the Act;

“investment grade” means a credit rating set out in Table 1 of the Sixth Schedule issued by the corresponding credit rating agency in that Table or any better credit rating;

“minimum condition liability”, in relation to a participating fund, means the sum of —

(a)	the liability in respect of each non-participating policy of the fund determined in the manner provided in regulation 20(1); and
(b)	the liability in respect of each participating policy of the fund determined in accordance with the manner provided in regulation 20(1) for determining the liability in respect of a non-participating policy, but does not include any provision for non-guaranteed benefits;

“money market debt security” means any debt security with a maturity of 12 months or less, and includes any banker’s acceptance, commercial paper, certificate of deposit or government or treasury bill or note, with a maturity of 12 months or less;

“non-participating fund” means an insurance fund established and maintained under section 17(2) of the Act which comprises wholly of non-participating policies;

“ordinary share” means any share other than a preference share;

“participating fund” means an insurance fund established and maintained under section 17(2) of the Act which comprises wholly or partly of participating policies;

“policy assets”, in relation to a participating fund, means the total assets of the fund as at valuation date less —

(a)	the balance in the surplus account established and maintained in accordance with regulation 22; and
(b)	other liabilities, as calculated in the manner provided in Form 1 of the First Schedule to the Insurance (Accounts and Statements) Regulations 2004 (G.N. No. S 494/2004);

“preference share”, in relation to a registered insurer incorporated in Singapore, has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

“public authority” means any body corporate constituted under any Act or under the law of any other country or territory for the purpose of carrying out a public function;

“qualifying Tier 2 instrument” has the meaning set out in paragraph 2 of the First Schedule;

“recognised multilateral agency” means an organisation listed in Table 2 of the Sixth Schedule;

“reinsurance recoverables” means any amount that an insurer is entitled to recover, but has yet to recover, from its reinsurance counterparty in respect of claims that have been paid by the insurer;

“share”, in relation to a registered insurer incorporated in Singapore, has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

“special risk” means —

(a)	any liability under a marine and aviation policy which consists of or which includes a liability arising from the insurance of a marine hull or aircraft hull; or
(b)	any other risk which, by reason of its exceptional nature or amount, the Authority permits to be treated as a special risk;

“total risk requirement” has the meaning set out in the Second Schedule;

“unit”, in relation to a collective investment scheme, has the same meaning as in section 2(1) of the Securities and Futures Act (Cap. 289);

“valuation date” means the date on which the assets and liabilities of a registered insurer are valued.

(2) In these regulations —

(a)	any reference to a policy of a participating, non-participating or investment-linked fund shall be construed as a reference to a policy in respect of which the participating, non-participating or investment-linked fund, as the case may be, is established or maintained by an insurer under the Act; and
(b)	any reference to a registered insurer incorporated in Singapore includes a registered insurer which is a society registered under the Co-operative Societies Act (Cap. 62).

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]

Search within Legislation