PART I | Citation and commencement |
| 1. These Regulations may be cited as the Insurance (Corporate Governance) Regulations 2013 and shall come into operation on 4th April 2013. |
| Application of these Regulations |
| 2. These Regulations shall apply to all direct insurers and reinsurers incorporated in Singapore other than marine mutual insurers. |
3.—(1) In these Regulations, unless the context otherwise requires —“associate”, in relation to a substantial shareholder, means —| (a) | any corporation in which the substantial shareholder controls the composition of the board of directors; | | (b) | any corporation in which the substantial shareholder controls more than half of the voting power; | | (c) | any corporation in which the substantial shareholder holds more than half of the issued share capital; | | (d) | any corporation which is a subsidiary of any other corporation which is an associate by virtue of paragraph (a), (b) or (c); | | (e) | any corporation in which the substantial shareholder or any other corporation which is an associate by virtue of paragraph (a), (b), (c) or (d) has, or the substantial shareholder and such other corporation together have, an interest in shares entitling the beneficial owners thereof the right to cast, whether by proxy or in person, not less than 20% but not more than 50% of the total votes able to be cast at a general meeting of the first-mentioned corporation; or | | (f) | any corporation (not being a corporation which is an associate by virtue of paragraph (a), (b), (c), (d) or (e)) the policies of which the substantial shareholder or any other corporation which is an associate by virtue of paragraph (a), (b), (c), (d) or (e) is, or the substantial shareholder together with such other corporation are, able to control or influence materially; |
|
| “Audit Committee” means an Audit Committee referred to in regulation 17; |
| “Board”, in relation to an insurer, means the board of directors of the insurer; |
| “board committee” means any of the committees specified in regulation 10 and the Executive Committee referred to in regulation 9; |
“corporation” —| (a) | has the same meaning as in section 4(1) of the Companies Act (Cap. 50); and | | (b) | includes a co-operative society; |
|
| “direct composite insurer” means a direct insurer registered to carry on both life business and general business under the Act; |
| “direct general insurer” means a direct insurer registered to carry on general business under the Act; |
| “direct life insurer” means a direct insurer registered to carry on life business under the Act; |
| “executive director”, in relation to a corporation, means a director who is concurrently an executive officer of that corporation, and “non-executive director” shall be construed accordingly; |
“executive officer”, in relation to a corporation, means any person, by whatever name described, who —| (a) | is in the direct employment of, or acting for or by arrangement with, the corporation; and | | (b) | is concerned with or takes part in the management of the corporation on a day-to-day basis; |
|
| “financial holding company” means a company belonging to a class of financial institutions approved as financial holding companies under section 28 of the Monetary Authority of Singapore Act (Cap. 186); |
| “financial year” has the same meaning as in section 4(1) of the Companies Act; |
| “immediate family”, in relation to an individual, means the individual’s spouse, child, adopted child, step-child, parent, step-parent, brother, step-brother, sister or step-sister; |
| “immediate subsidiary” means a subsidiary as defined under section 5(1)(a) of the Companies Act; |
“independent director”, in relation to an insurer, means a director who —| (a) | is independent from any management and business relationship with the insurer; | | (b) | is independent from any substantial shareholder of the insurer; and | | (c) | has not served on the Board of the insurer for a continuous period of 9 years or longer; |
|
| “insurance funds” means the funds established and maintained under section 17 of the Act; |
| “limited liability partnership” has the same meaning as in section 2(1) of the Limited Liability Partnerships Act (Cap. 163A); |
“marine mutual insurance business” means the business of providing the insurance of liabilities under insurance policies on the basis of mutual insurance (within the meaning of section 85 of the Marine Insurance Act (Cap. 387)) on such risk or risks as follows:| (a) | upon goods, merchandise or property of any description transported on board vessel, including incidental transit before and after shipment; | | (b) | upon the freight of, or any other interest in or relating to, vessels; | | (c) | upon vessels, or upon machinery, tackle furniture or equipment of vessels; | | (d) | against damage arising out of or in connection with the use of vessels, including third-party risks; | | (e) | against risks incidental to the construction, repair or docking of vessels, including third-party risks; or | | (f) | against such other risks as the Authority considers to be connected with or incidental to marine adventures or any of the matters referred to in paragraphs (a) to (e); |
|
| “marine mutual insurer” means an insurer which is registered under section 8 of the Act as a direct insurer to carry on general business and is permitted to carry on marine mutual insurance business only; |
| “Nominating Committee” means a Nominating Committee referred to in regulation 11; |
| “Remuneration Committee” means a Remuneration Committee referred to in regulation 16; |
| “Risk Management Committee” means a Risk Management Committee referred to in regulation 18; |
| “subsidiary” has the same meaning as in section 5 of the Companies Act; |
| “substantial shareholder” has the same meaning as in section 81 of the Companies Act. |
(2) In these Regulations, in relation to a company which may dispense with the holding of annual general meetings under section 175A of the Companies Act —| (a) | a reference to the doing of anything at an annual general meeting shall, in the case of such a company, be read as a reference to the doing of that thing by way of a resolution by written means in accordance with the Companies Act; and | | (b) | a reference to the date of an annual general meeting of such a company shall, unless the meeting is held, be read as a reference to the date of expiry of the period within which the meeting is required by law to be held. |
|
|
| Tier 1 and Tier 2 insurers |
4.—(1) For the purposes of these Regulations, a registered insurer is —| (a) | a Tier 1 insurer if the insurer —| (i) | is established or incorporated in Singapore; and | | (ii) | in the case of —| (A) | a direct life insurer, its latest annual audited statement of financial position shows that it has total assets of at least $5 billion or its equivalent in any foreign currency; [S 842/2018 wef 01/01/2019] | | (B) | a direct general insurer or a reinsurer, its latest annual audited statement of profit and loss shows that it has gross premiums of at least $500 million or its equivalent in any foreign currency in its insurance funds and Overseas (Branch) Operations; and [S 842/2018 wef 01/01/2019] | | (C) | a direct composite insurer, satisfies the requirements of sub-paragraph (A) in respect of its total assets or sub-paragraph (B) in respect of gross premiums for its general business; and |
|
| | (b) | a Tier 2 insurer if the insurer —| (i) | is established or incorporated in Singapore; and | | (ii) | does not satisfy the requirement under sub‑paragraph (a)(ii) as a Tier 1 insurer. [S 842/2018 wef 01/01/2019] |
|
| (2) An insurer who satisfies the requirement under paragraph (1)(a)(ii) as a Tier 1 insurer is a Tier 1 insurer starting on 1 April of the year in which the latest annual audited statement of financial position or latest annual audited statement of profit and loss, showing that requirement is satisfied, is lodged with the Authority. [S 842/2018 wef 01/01/2019] |
| (3) A registered insurer that is a Tier 1 insurer shall continue to be a Tier 1 insurer, notwithstanding he no longer satisfies the requirements of paragraph (1)(a)(ii), until such time as the Authority approves him as a Tier 2 insurer for the purposes of these Regulations as from (and including) a date specified in the approval. |
(4) In determining whether to grant an approval under paragraph (3), the Authority shall have regard to one or more of the following matters:| (a) | the insurer’s business strategy; | | (b) | the insurer’s business plans; | | (c) | any other matter that the Authority considers relevant. |
|
| (5) The Authority may revoke an approval granted under paragraph (3), whereupon the insurer shall be a Tier 1 insurer for the purposes of these Regulations as from (and including) a date specified in the revocation. |
(6) In this regulation —“latest annual audited statement of financial position” means —| (a) | the latest annual audited statement of financial position lodged by the insurer with the Authority in Form A1 in Appendix B to MAS Notice 129; or | | (b) | if the insurer has not lodged with the Authority any annual audited statement of financial position in Form A1 in Appendix B to MAS Notice 129, the latest annual audited Form 8 in the First Schedule to the Insurance (Accounts and Statements) Regulations 2004 (G.N. No. S 494/2004) as in force immediately before 1 January 2019; |
|
“latest annual audited statement of profit and loss” means —| (a) | the latest annual audited statement of profit and loss lodged by the insurer with the Authority in Form A2 in Appendix B to MAS Notice 129; or | | (b) | if the insurer has not lodged with the Authority any annual audited statement of profit and loss in Form A2 in Appendix B to MAS Notice 129, the latest annual audited Form 9 in the First Schedule to the Insurance (Accounts and Statements) Regulations 2004 as in force immediately before 1 January 2019; |
|
| “MAS Notice 129” means the notice commonly known as MAS Notice 129 issued by the Authority under sections 36(3) and (3A), 37(1)(b) and 64(2) of the Act, as amended from time to time, and includes any notice that replaces it; |
| “Overseas (Branch) Operations”, in relation to a registered insurer, means the income and outgoings of the operations of all branches of the insurer located outside Singapore. |
[S 842/2018 wef 01/01/2019] |
|
| Independence from management and business relationships |
5.—(1) In these Regulations, subject to regulation 14 or 23, as the case may be, a director shall be considered to be independent from management and business relationships with an insurer if —| (a) | the director has no management relationship with the insurer or any of its subsidiaries; and | | (b) | the director has no business relationship with the insurer or any of its subsidiaries, or with any officer of the 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 insurer. |
(2) Without prejudice to paragraph (1)(a), a director shall not be considered to be independent from management relationships with an insurer or any of its subsidiaries if —| (a) | he is employed by the 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 insurer or any of its subsidiaries; | | (b) | any member of his immediate family —| (i) | is employed by the insurer or any of its subsidiaries as an executive officer whose compensation is determined by the Remuneration Committee or the Board of the insurer 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 insurer or any of its subsidiaries; or |
| | (c) | he 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 insurer or any of its subsidiaries. |
|
(3) Without prejudice to paragraph (1)(b) but subject to regulation 14 or 23, as the case may be, a director shall not be considered to be independent from business relationships with the insurer or any of its subsidiaries if —| (a) | he is 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, where such corporation, firm, limited liability partnership or sole proprietor carries on business for purposes of profit to which the insurer or any of its subsidiaries has made, or from which the insurer or any of its subsidiaries has received, payments in the current or immediately preceding financial year; or | | (b) | he is receiving or has received any compensation from the insurer or from any of the insurer’s subsidiaries, other than compensation received for his services as a director or as an employee, at any time during the current or immediately preceding financial year of the insurer. |
|
(4) In this regulation, “officer”, in relation to an insurer, includes —| (a) | a director, a secretary or an employee of the insurer; | | (b) | a receiver or manager of any part of the undertaking of the insurer appointed under a power contained in any instrument; and | | (c) | the liquidator of the insurer appointed in a voluntary winding-up. |
|
|
| Independence from substantial shareholder |
6.—(1) In these Regulations, subject to regulation 14 or 23, as the case may be, a director of an insurer shall be considered to be independent from a substantial shareholder of the insurer if he is not that substantial shareholder and is not connected to that substantial shareholder.(2) Notwithstanding paragraph (1), a director of an insurer which is —| (a) | the immediate subsidiary of another insurer (referred to in this paragraph as the parent insurer); or | | (b) | the sole subsidiary of a financial holding company which does not carry on any business other than the holding of the insurer, |
| shall, if he is not a substantial shareholder of the insurer, the parent insurer or the financial holding company, as the case may be, and is not connected to — |
| (i) | a substantial shareholder of the insurer (other than the parent insurer or financial holding company); or | | (ii) | a substantial shareholder of the parent insurer or financial holding company, as the case may be, |
| be treated as if he were independent from the substantial shareholder of the insurer for the purposes of regulations 7(1), 9, 11(1), 16(1) and 17(1). |
|
(3) For the purposes of paragraph (1), a person is connected to a substantial shareholder if he 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. |
|
|
|
7.—(1) Every insurer shall —| (a) | have a Board comprising at least 3 directors; and | | (b) | in the case where —| (i) | the insurer is a Tier 1 insurer, subject to paragraphs (2), (3) and (4) and regulations 14(3) and 20, have a Board comprising at least a majority of directors who are independent directors; or | | (ii) | the insurer is a Tier 2 insurer, subject to paragraphs (3) and (4) and regulations 23(3) and 29, have a Board comprising at least one-third of directors who are independent directors. |
|
(2) Where a single substantial shareholder holds 50% or more of the share capital or the voting power in a Tier 1 insurer, paragraph (1)(b)(i) shall not apply to the Tier 1 insurer only if the Tier 1 insurer has a Board comprising —| (a) | at least a majority of directors who are independent from management and business relationships with the Tier 1 insurer; and | | (b) | at least one-third of directors who are independent directors. |
|
(3) If a member of the Board of an insurer resigns or ceases to be a member of the Board for any other reason, the insurer shall —| (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 such number of new directors as may be required to rectify the composition of the Board in accordance with the requirements under paragraph (1). |
|
| (4) Notwithstanding paragraph (3), the Authority may, upon being notified under paragraph (3)(a), direct the insurer to rectify the composition of the Board in accordance with the requirements under paragraph (1) within such time before the next annual general meeting of the insurer, subject to such conditions or restrictions as the Authority may specify, and the insurer shall comply with that direction. |
| (5) The Board shall maintain records of all its meetings. |
| (6) Any insurer which contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 and, in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part thereof during which the offence continues after conviction. |
| (7) Any insurer which contravenes paragraph (3)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000. |
| (8) Any insurer which fails to comply with any condition or restriction imposed by the Authority under paragraph (4) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000. |
|
8.—(1) An insurer shall not appoint any of the following persons as the chairman of its Board:| (a) | any of its executive directors; | | (b) | any person who is a member of the immediate family of the principal officer of the insurer. |
| (2) Any insurer which contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 and, in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part thereof during which the offence continues after conviction. |
|
|
