Valuation of liabilities of life business
20.—(1)  Subject to paragraph (4), a licensed insurer shall value the liability in respect of a non-participating policy as the value of expected future payments arising from the policy, including any expense that the insurer expects to incur in administering the policy and settling any relevant claims and any provision made for any adverse deviation from the expected experience, less expected future receipts arising from the policy.
[S 233/2013 wef 18/04/2013]
(2)  Subject to paragraph (4), a licensed insurer shall value the liability in respect of an investment-linked policy as the sum of —
(a)the unit reserves, calculated as the value of the underlying assets backing the units relating to the policy; and
(b)the non-unit reserves, calculated as the value of expected future payments arising from the policy (other than those relating to the unit reserves), including any expense that the insurer expects to incur in administering the policies and settling the relevant claims and any provision made for any adverse deviation from the expected experience, less expected future receipts arising from the policy (other than those relating to the unit reserves).
[S 233/2013 wef 18/04/2013]
(3)  Subject to paragraphs (4) and (7), a licensed insurer shall value the liability in respect of a participating policy as the sum of —
(a)the value of expected future payments arising from guaranteed benefits of the policy, including any expense that the insurer expects to incur in administering the policies and settling the relevant claims, less expected future receipts arising from guaranteed benefits of the policy;
(b)the value of expected payments arising from non-guaranteed benefits of the policy in respect of —
(i)future allocations by way of bonus under section 17(6)(b) of the Act; and
(ii)future allocations to the surplus account under section 17(6)(c) of the Act; and
[S 884/2005 wef 31/12/2005]
(c)any provision made for any adverse deviation from the expected experience.
[S 884/2005 wef 31/12/2005]
[S 233/2013 wef 18/04/2013]
(4)  A licensed insurer shall not value the liability in respect of any policy to be less than zero, unless there are moneys due to the insurer when the policy is terminated on valuation date, in which event the value of the liability in respect of that policy may be negative to the extent of the amount due to the insurer.
[S 233/2013 wef 18/04/2013]
(5)  A licensed insurer shall calculate the liability in respect of the policies of a non-participating fund or an investment-linked fund as the sum of the liability in respect of each policy of that fund determined in the manner provided in paragraph (1) or (2), respectively.
[S 233/2013 wef 18/04/2013]
(6)  A licensed insurer shall calculate the liability in respect of the policies of a participating fund as —
(a)the sum of the liability in respect of each policy of the fund determined in the manner provided in paragraphs (1) and (3);
(b)the minimum condition liability of the fund; or
(c)the value of policy assets of the fund, whichever is the highest.
[S 233/2013 wef 18/04/2013]
(7)  Where the liability in respect of the policies of a participating fund determined in the manner provided in paragraph (6) is greater than the sum of the liability in respect of each policy of the fund as determined in the manner provided in paragraphs (1) and (3), the insurer shall make such adjustments as may be necessary to the components for the valuation of the liability in respect of a participating policy referred to in paragraph (3)(b), for all or part of the participating policies of the fund such that the sum of the liability in respect of each policy of the fund equals the value determined in paragraph (6).