Insurance (General Provisions and Exemptions for Special Purpose Reinsurance Vehicles) Regulations 2008

No. S 617

Insurance Act

(Chapter 142)

Insurance (General Provisions and Exemptions for Special Purpose Reinsurance Vehicles) Regulations 2008

In exercise of the powers conferred by sections 9, 18, 36, 52 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 (General Provisions and Exemptions for Special Purpose Reinsurance Vehicles) Regulations 2008 and shall come into operation on 2nd December 2008.

Definitions

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

“aggregate limit”, in relation to a contract of reinsurance entered into between an SPRV and any ceding insurer, means the maximum amount payable to the ceding insurer under that contract;

“ceding insurer” means an insurer that enters into a contract of reinsurance with an SPRV;

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

“electronic record” has the same meaning as in section 2 of the Electronic Transactions Act (Cap. 88);

“fully funded”, in relation to an SPRV, means —

(a)

in the case of any contract of reinsurance entered into between the SPRV and any ceding insurer that specifies an aggregate limit, that the assets held on trust or otherwise held under the terms of that contract by or on behalf of the SPRV for the benefit of the ceding insurer are, at all times, not less than the potential liabilities of the SPRV under all reasonably foreseeable scenarios, taking into account the aggregate limit of that contract and the expenses the SPRV expects to incur; and

(b)

in the case of any contract of reinsurance entered into between the SPRV and any ceding insurer that does not specify an aggregate limit, that the assets held on trust or otherwise held under the terms of that contract by or on behalf of the SPRV for the benefit of the ceding insurer are, at all times, not less than the potential liabilities of the SPRV under all reasonably foreseeable scenarios, taking into account the obligations of the SPRV towards the ceding insurer under that contract and the expenses the SPRV expects to incur;

“insurance securitisation”, in relation to an SPRV, means any debt or other financing arrangement entered into by the SPRV with investors, where repayment of the principal or interest, or both, to the investors is contingent upon the occurrence or non-occurrence of an event whereupon the ceding insurer is exposed to financial loss under contracts of insurance or reinsurance it has issued;

“Special Purpose Reinsurance Vehicle” or “SPRV” means an insurer registered under section 8 of the Act as a reinsurer to carry on life or general business or both classes of business and —

(a)	is created for the sole purpose of entering into contracts of reinsurance with one or more ceding insurers; and
(b)	at all times fully funds its obligations under the contracts of reinsurance with the ceding insurers referred to in paragraph (a) through insurance securitisation.

Made this 28th day of November 2008.

HENG SWEE KEAT

Managing Director,
Monetary Authority of Singapore.

[ID 05.1 V.32; AG/LEG/SL/142/2002/1 Vol. 11]

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