PART 1 | Citation and commencement |
| 1. These Regulations are the Financial Holding Companies (Corporate Governance of Designated Financial Holding Companies with Licensed Insurer Subsidiary) Regulations 2022 and come into operation on 30 June 2022. |
2.—(1) In these Regulations, unless the context otherwise requires —| “associate” has the meaning given by paragraph 1 of the Schedule to the Act; |
| “Audit Committee” means an Audit Committee mentioned in regulation 17; |
| “Board”, in relation to a DFHC (Licensed Insurer), means the board of directors of the DFHC (Licensed Insurer); |
| “designated FHC” or “DFHC” means a designated financial holding company; |
| “designated FHC with licensed insurer subsidiary” or “DFHC (Licensed Insurer)” means a DFHC that has a subsidiary that is a licensed insurer incorporated, formed or established in Singapore; |
| “executive director”, in relation to a corporation, means a director who is concurrently an executive officer of that corporation, and “non‑executive director” is to be construed accordingly; |
| “FHC” means a financial holding company; |
| “financial year” has the meaning given by section 4(1) of the Companies Act 1967; |
| “immediate family”, in relation to an individual, means the individual’s spouse, child, adopted child, stepchild, parent, step‑parents, brother, stepbrother, sister or stepsister; |
“independent director”, in relation to a DFHC (Licensed Insurer), means a director who —| (a) | is independent from any management and business relationship with the DFHC (Licensed Insurer); | | (b) | is independent from any substantial shareholder of the DFHC (Licensed Insurer); and | | (c) | has not served on the Board for a continuous period of 9 years or longer; |
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| “Nominating Committee” means a Nominating Committee mentioned in regulation 11; |
| “Remuneration Committee” means a Remuneration Committee mentioned in regulation 16; |
| “Risk Management Committee” means a Risk Management Committee mentioned in regulation 18. |
(2) In these Regulations, in relation to a company that has dispensed with the holding of annual general meetings under section 175A of the Companies Act 1967 —| (a) | a reference to the doing of anything at an annual general meeting is a reference to the doing of that thing by way of a resolution by written means in accordance with the Companies Act 1967; and | | (b) | a reference to the date of an annual general meeting of such a company is, unless the meeting is held, a reference to the date of expiry of the period within which the meeting is required by law to be held. |
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| Tier 1 and Tier 2 DFHC (Licensed Insurer) |
3.—(1) For the purposes of these Regulations, a DFHC (Licensed Insurer) is —| (a) | a Tier 1 DFHC (Licensed Insurer) if —| (i) | the DFHC (Licensed Insurer) holds, directly or indirectly, any share in one or more insurance companies carrying on life business, and the consolidated total assets of the FHC group of the DFHC (Licensed Insurer) is $20 billion or more in value or its equivalent in any foreign currency; | | (ii) | all insurance companies in the FHC group of the DFHC (Licensed Insurer) carry on only general business, and the consolidated total gross premium of the FHC group of the DFHC (Licensed Insurer) is $2 billion or more in value or its equivalent in any foreign currency; or | | (iii) | the DFHC (Licensed Insurer) has at least one subsidiary that is a Tier 1 insurer; and |
| | (b) | a Tier 2 DFHC (Licensed Insurer) if the DFHC (Licensed Insurer) does not satisfy any of the requirements under sub‑paragraph (a)(i), (ii) or (iii) as a Tier 1 DFHC (Licensed Insurer). |
(2) For the purposes of paragraph (1) —| (a) | the consolidated total assets of the FHC group of a DFHC (Licensed Insurer) refer to “Total Assets” as reported under the column on “Group (Consolidated Accounts)” in Form 1A of the latest annual returns submitted by the DFHC (Licensed Insurer) to the Authority in accordance with FHC‑N129 Notice to Designated Financial Holding Companies, Financial Holding Companies Act 2013 on Returns; and | | (b) | the consolidated total gross premium of the FHC Group of a DFHC (Licensed Insurer) refers to “Gross Premium” as reported under the column on “Group (Consolidated Accounts)” in Form 2A of the latest annual returns submitted by the DFHC (Licensed Insurer) to the Authority in accordance with FHC‑N129 Notice to Designated Financial Holding Companies, Financial Holding Companies Act 2013 on Returns. |
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(3) In this regulation —| “foreign country” means any country or territory other than Singapore; |
| “general business” has the meaning given by section 3(1)(b) of the Insurance Act 1966; |
| “insurance company” means any company that is carrying on insurance business, whether or not it is approved, licensed, registered, authorised, or otherwise regulated by the Authority, or a regulatory authority of a foreign country, to carry on insurance business; |
| “life business” has the meaning given by section 3(1)(a) of the Insurance Act 1966; |
| “regulatory authority”, in relation to a foreign country, means any authority of the foreign country exercising any function that corresponds to a regulatory function of the Authority under the Insurance Act 1966; |
| “Tier 1 insurer” has the meaning given by regulation 4(1)(a) of the Insurance (Corporate Governance) Regulations 2013 (G.N. No. S 197/2013). |
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| Independence from management and business relationships |
4.—(1) In this Part, subject to regulation 14 or 22 (as the case may be), a director is independent from management and business relationships with a DFHC (Licensed Insurer) if —| (a) | the director has no management relationship with the DFHC (Licensed Insurer) or any of its subsidiaries; and | | (b) | the director has no business relationship with the DFHC (Licensed Insurer) or any of its subsidiaries, or with any officer of the DFHC (Licensed Insurer), |
| that could interfere, or be reasonably regarded as interfering, with the exercise of the director’s independent business judgment with regard to the interests of the DFHC (Licensed Insurer). |
(2) Without limiting paragraph (1)(a), a director is not considered to be independent from management relationships with a DFHC (Licensed Insurer) or any of its subsidiaries if —| (a) | the director is employed by the DFHC (Licensed Insurer) or any of its subsidiaries, or has been so employed at any time during the current financial year or any of the preceding 3 financial years of the DFHC (Licensed Insurer) or any of its subsidiaries; | | (b) | a member of the director’s immediate family —| (i) | is employed by the DFHC (Licensed Insurer) or any of its subsidiaries as an executive officer whose compensation is determined by the Remuneration Committee or the Board of the DFHC (Licensed Insurer) (as the case may be) or any of its subsidiaries; or | | (ii) | has been so employed at any time during the current financial year or any of the preceding 3 financial years of the DFHC (Licensed Insurer) or any of its subsidiaries; or |
| | (c) | the director is accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the management of the DFHC (Licensed Insurer) or any of its subsidiaries. |
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(3) Without limiting paragraph (1)(b) but subject to regulation 14 or 22 (as the case may be), a director is not considered to be independent from business relationships with a DFHC (Licensed Insurer) or any of its subsidiaries if —| (a) | the director is also a director, a substantial shareholder or an executive officer of any corporation, or a partner of a firm or a limited liability partnership or a sole proprietor, which carries on business for purposes of profit —| (i) | such corporation, firm, limited liability partnership or sole proprietorship carries on business for purposes of profit to which the DFHC (Licensed Insurer) or any of its subsidiaries has made payments; or | | (ii) | from which the DFHC (Licensed Insurer) or any of its subsidiaries has received payments, |
| in the current or immediately preceding financial year of the DFHC (Licensed Insurer) or any of its subsidiaries; or |
| | (b) | the director is receiving or has received, any compensation from the DFHC (Licensed Insurer) or from any of the DFHC (Licensed Insurer)’s subsidiaries (other than compensation received for his or her services as a director or as an employee) at any time during the current or immediately preceding financial year of the DFHC (Licensed Insurer) or any of its subsidiaries. |
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| Independence from substantial shareholder |
5.—(1) In this Part, subject to regulation 14 or 22 (as the case may be), a director of a DFHC (Licensed Insurer) is independent from a substantial shareholder of the DFHC (Licensed Insurer) if the director is not that substantial shareholder and is not connected to that substantial shareholder.(2) Despite paragraph (1), a director of a DFHC (Licensed Insurer) (A) that is the sole subsidiary of another DFHC (B) that does not carry on any business other than the holding of A is to be treated as independent from the substantial shareholder of A for the purposes of regulations 6(1), 9, 11(1), 16(1) and 17(1), if the director —| (a) | is not a substantial shareholder of A or B; and | | (b) | is not connected to —| (i) | a substantial shareholder of A (other than B); or | | (ii) | a substantial shareholder of B. |
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(3) For the purposes of paragraph (1), a person is connected to a substantial shareholder if the person is —| (a) | in the case where the substantial shareholder is an individual —| (i) | a member of the immediate family of the substantial shareholder; | | (ii) | employed by the substantial shareholder; | | (iii) | employed by an associate of the substantial shareholder; | | (iv) | an executive director of an associate of the substantial shareholder; | | (v) | a non‑executive director of an associate of the substantial shareholder; | | (vi) | a partner of a firm or a limited liability partnership of which the substantial shareholder is also a partner; or | | (vii) | accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder; or |
| | (b) | in the case where the substantial shareholder is a corporation —| (i) | employed by the substantial shareholder; | | (ii) | employed by an associate of the substantial shareholder; | | (iii) | a director of the substantial shareholder; | | (iv) | an executive director of an associate of the substantial shareholder; | | (v) | a non‑executive director of an associate of the substantial shareholder; | | (vi) | a partner of a firm or a limited liability partnership of which the substantial shareholder is also a partner; or | | (vii) | accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of the substantial shareholder. |
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6.—(1) Every DFHC (Licensed Insurer) must —| (a) | have a Board comprising at least 3 directors; and | | (b) | in the case of —| (i) | a Tier 1 DFHC (Licensed Insurer) — subject to paragraphs (2), (3) and (4) and regulations 14(3) and 19, have a Board comprising at least a majority of directors who are independent directors; or | | (ii) | a Tier 2 DFHC (Licensed Insurer) — subject to paragraphs (3) and (4) and regulations 22(3) and 28, have a Board comprising at least one‑third of directors who are independent directors. |
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(2) Where a single substantial shareholder holds 50% or more of the share capital or the voting power in a Tier 1 DFHC (Licensed Insurer), paragraph (1)(b)(i) does not apply to the Tier 1 DFHC (Licensed Insurer) only if the DFHC (Licensed Insurer) has a Board comprising —| (a) | at least a majority of directors who are independent from management and business relationships with the DFHC (Licensed Insurer); and | | (b) | at least one‑third of directors who are independent directors. |
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(3) If a member of the Board resigns or ceases to be a member of the Board for any other reason, the DFHC (Licensed Insurer) must —| (a) | notify the Authority of the event within 14 days after the occurrence of the event; and | | (b) | on or before its next annual general meeting, appoint the number of new directors that is necessary to rectify the composition of the Board in accordance with the requirements under paragraph (1). |
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| (4) Despite paragraph (3), the Authority may, on being notified under paragraph (3)(a), direct the DFHC (Licensed Insurer) to rectify the composition of the Board in accordance with the requirements under paragraph (1) within the time before the next annual general meeting of the DFHC (Licensed Insurer), and subject to any conditions or restrictions, that the Authority may specify, and the DFHC (Licensed Insurer) must comply with that direction. |
| (5) The Board must maintain records of all its meetings. |
(6) A DFHC (Licensed Insurer) that contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction —| (a) | to a fine not exceeding $25,000; and | | (b) | in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part of a day during which the offence continues after conviction. |
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| (7) A DFHC (Licensed Insurer) that contravenes paragraph (3)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000. |
| (8) A DFHC (Licensed Insurer) that fails to comply with a direction of the Authority under paragraph (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000. |
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7.—(1) A DFHC (Licensed Insurer) must not appoint any of the following persons as the chairperson of its Board:| (a) | any of its executive directors; | | (b) | any person who is a member of the immediate family of the chief executive of the DFHC (Licensed Insurer). |
(2) A DFHC (Licensed Insurer) that contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction —| (a) | to a fine not exceeding $25,000; and | | (b) | in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part of a day during which the offence continues after conviction. |
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| Approval of Authority for certain appointments |
8.—(1) The following positions in a Tier 1 DFHC (Licensed Insurer) are prescribed for the purposes of section 63(2) of the Act:| (a) | the chairperson of the Board; | | (b) | the members of the Nominating Committee; | | (c) | the deputy chief executive; | | (d) | the chief financial officer; | | (e) | the chief risk officer. |
(2) The following positions in a Tier 2 DFHC (Licensed Insurer) are prescribed for the purposes of section 63(2) of the Act:| (a) | the chairperson of the Board; | | (b) | the deputy chief executive. |
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(3) A person —| (a) | whose appointment as director or chief executive, or for a position mentioned in paragraph (1) or (2), has been approved by the Authority under regulation 35 of the Banking (Corporate Governance) Regulations 2005 (G.N. No. S 583/2005), or under any directions issued under section 28 of the Monetary Authority of Singapore Act 1970, in force immediately before 30 June 2022; and | | (b) | whose approval of appointment has not expired or been revoked before that date, |
| is taken to be so appointed with the approval of the Authority under section 63 of the Act, for a term expiring on the date when the person’s term of appointment would have expired if these Regulations had not been enacted. |
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| (4) Any condition to which the approval of the Authority under paragraph (3)(a) was subject and that was in force immediately before 30 June 2022, continues to have effect as a condition of the approval of the Authority under section 63 of the Act mentioned in paragraph (3). |
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