17.—(1) Before any assets are transferred under regulation 11(6), the administrator shall establish in favour of the Authority an irrevocable letter of credit issued by a bank licensed under the Banking Act (Cap.19) in a form acceptable to the Authority, to secure payment of the net liabilities of the members of the syndicate concerned from time to time outstanding (as determined quarterly) under all Singapore policies and offshore policies issued by the members of the syndicate under these Regulations.
(2) The Authority may call on the letter of credit furnished under paragraph (1) to satisfy any valid claim of a policy owner of a policy issued by a member of Lloyd’s under these Regulations which remains unpaid 30 days after the issue of a notice by the Authority under paragraph (3).
(3) Before calling on the letter of credit furnished under paragraph (1), the Authority shall give the administrator a notice in writing of its intention to do so and identify the claim in respect of which the letter of credit is to be applied.
(4) In this regulation —
“gross outstanding claims” means claims that have been notified and quantified gross of reinsurance recoveries;
“net liabilities” means the gross outstanding claims less credit for ceded reinsurance.