PART VI
MISCELLANEOUS PROVISIONS
Surplus account
22.—(1)  For the purpose of section 17(6)(a) of the Act, a direct insurer registered to carry on life business shall establish and maintain a surplus account —
(a)by keeping the assets of the surplus account for a participating fund separate from other assets of the fund; and
(b)by identifying the particular assets that form part of the surplus account in its books, accounts and records.
(2)  For any participating fund established before 1st January 2005, the insurer shall assign, as the balance in the surplus account as at 1st January 2005, the value of —
(a)the higher of —
(i)the amount of surplus of assets over liabilities allocated to the shareholders for the accounting period beginning from 1st January 2004 and ending on 31st December 2004 but which has yet to be transferred from the participating fund to the shareholders funds; or
(ii)zero; or
(b)the total assets of the fund less the sum of —
(i)the minimum condition liability of the fund; and
(ii)other liabilities as calculated in the manner provided in Form 1 in the First Schedule to the Insurance (Accounts and Statements) Regulations 2004 (G.N. No. S 494/2004), immediately before 1st January 2005, whichever is the lower.
(3)  For any participating fund established on or after 1st January 2005, the insurer shall assign, as the balance in the surplus account, the value of zero at the establishment of the fund.
(4)  For the purposes of section 17(7) of the Act, the insurer may, in addition to an allocation made under section 17(6)(c) of the Act, make the following allocations to the surplus account:
(a)an amount relating to investment income earned on assets representing the balance in the surplus account;
(b)a recovery of any amount transferred out of the surplus account on or after 1st January 2005 under paragraph (7) if it has not been transferred back into the surplus account previously.
(5)  The amount of a participating fund allocated by way of bonus to participating policies under section 17(6)(b) of the Act by the insurer shall be —
(a)where the allocation is not immediately paid out but is accrued as additional future obligations under the policies, the increase in minimum condition liability as a result of such allocation; or
(b)where the allocation is immediately paid out when the allocation is made, the actual amount paid out.
(6)  The insurer may transfer any asset which is not part of the participating fund to the surplus account where such transfer is made —
(a)to comply with paragraph (9);
(b)to satisfy the fund solvency requirement of the participating fund; or
(c)to reduce the likelihood that the fund solvency requirement of the participating fund is breached.
(7)  Where the liability in respect of the policies of the participating fund of the insurer as calculated in the manner provided in regulation 20(6) is more than the policy assets of the fund, the insurer shall immediately transfer out of the surplus account an amount no less than the difference between the liability in respect of the policies of the fund and the policy assets of the fund so as to meet any deficiency of policy assets in satisfying the liabilities in respect of policies of the fund.
(8)  The insurer shall deduct from the surplus account —
(a)any amount withdrawn from the fund in accordance with section 17(9) of the Act;
(b)any expense or loss relating to the investment of assets in the surplus account; and
(c)where the balance in the surplus account is negative, the interest that would have been earned on such negative balance calculated, on a monthly basis, using the average rate of investment return on the policy assets of the fund, subject to a minimum rate of zero.
(9)  Where the balance in the surplus account is negative, the insurer shall immediately make payment into the surplus account so that the balance in the surplus account is at least zero.
(10)  In paragraph (5), “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) but does not include the application of regulation 20(4); 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 the application of regulation 20(4) and any provision for non-guaranteed benefits.
Contingency reserves
22A.—(1)  In addition to maintaining claim liabilities and premium liabilities as required under regulation 19, a mortgage insurer and a trade credit insurer shall, in accordance with the requirements specified in the Seventh Schedule, establish and maintain contingency reserves in each insurance fund established and maintained under section 17(1) of the Act by the mortgage insurer or trade credit insurer.
(2)  Notwithstanding paragraph (1), where the mortgage insurer does not have any claim liabilities and premium liabilities in respect of all the mortgage insurance policies, the mortgage insurer may withdraw the contingency reserves held in respect of mortgage insurance policies.
[S 112/2012 wef 28/03/2012]
Revocation
23.  The Insurance Regulations (Rg 1) and the Insurance (Investment-Linked Life Insurance) Regulations (Rg 4) are revoked.
Savings and transitional provisions
24.—(1)  These Regulations shall not apply to any registered insurer which carried on insurance business immediately before the appointed day for the period from the appointed day to 31st December 2004.
(2)  The registered insurer referred to in paragraph (1) shall continue to comply with the Insurance Regulations (other than regulations 23, 24 and 25) (Rg 1) and the Insurance (Investment-Linked Life Insurance) Regulations (Rg 4) in force immediately before the appointed day during —
(a)the period referred to in paragraph (1); and
(b)the period from the day immediately following the end of the period referred to in paragraph (1) to the day on which the registered insurer lodges the statements of account and other statements required under the Insurance (Accounts and Statements) Regulations (Rg 2) in force immediately before the appointed day in respect of the accounting period beginning 1st January 2004 and ending on 31st December 2004 (both days inclusive),
for the purpose of enabling the insurer to comply with regulation 18(2) of the Insurance (Accounts and Statements) Regulations 2004 (G.N. No. S 494/2004) in respect of the preparation and lodgment of the statements of account and other statements required to be lodged under the Insurance (Accounts and Statements) Regulations.
(3)  Notwithstanding paragraphs (1) and (2), any registered insurer may elect to comply with these Regulations at any time before the expiry of the period referred to in paragraph (1).
(4)  Where a registered insurer elects to comply with these Regulations under paragraph (3), the insurer shall give the Authority notice in writing of the date from which the insurer elects to comply with these Regulations no later than 14 days after that date, and in that event —
(a)paragraph (1) shall not apply to the insurer from the date the election is made; and
(b)paragraph (2) shall continue to apply to the insurer.
(5)  Notwithstanding regulation 22, where an insurer elects to comply with these Regulations under paragraph (3), regulation 22(2) shall not apply in relation to any participating fund established before 1st January 2005 and the insurer shall assign, as the balance in the surplus account as at —
(a)where the participating fund was established on or before the date of the election, the date when the election is made; or
(b)where the participating fund is established after the date of the election, the date on which the fund is established,
the value of —
(i)the higher of —
(A)the amount of surplus of assets over liabilities allocated to the shareholders as at the date the election is made, or when the fund is established, as the case may be, but which has yet to be transferred from the participating fund to the shareholders fund; or
(B)zero; or
(ii)the total assets immediately before the date when the election is made or when the fund is established, as the case may be, of the fund less the sum of —
(A)the minimum condition liability of the fund; and
(B)all 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),
whichever is the lower.