Concessionary rate of tax and exemption for approved captive insurer
11.—(1) Subject to the condition in paragraph (5), the income mentioned in paragraph (3) derived by an approved captive insurer in a basis period for any year of assessment is exempt from tax, if its approval is granted on or after 1 June 2017 but before 1 April 2018.
(2) Subject to the condition in paragraph (5), tax is payable at the rate of 10% on the income mentioned in paragraph (3) derived by an approved captive insurer in a basis period for any year of assessment, if its approval is granted on or after 1 April 2018.
(3) For the purposes of paragraph (1), the income is —
(a)
underwriting income derived from the insurer’s captive general business in Singapore (excluding specified captive business);
(b)
the part of A that is ascertained by the formula
(c)
the part of B that is ascertained by the formula and
(d)
the part of C that is ascertained by the formula
(4) In paragraph (3) —
“A”, “B”, “C”, “Pig” and “Pog” have the same meanings as in regulation 8(3), with each reference to approved insurer substituted with the reference to approved captive insurer;
“Picx” is the total amount of gross premiums received or receivable in the basis period in respect of all policies underwritten by the approved captive insurer in the course of carrying on its captive general business in Singapore (other than offshore captive general business), excluding the amount of gross premiums received or receivable by the insurer in that basis period in respect of —
(a)
all policies covering third parties which are not underwritten by the insurer in the course of, nor incidental to, that business; and
(b)
all direct stand‑alone policies underwritten by the insurer in the course of that business;
“Pocx” is the total amount of gross premiums received or receivable in the basis period in respect of all policies underwritten by the approved captive insurer in the course of carrying on its offshore captive general business in Singapore, excluding the amount of gross premiums received or receivable by the insurer in that basis period in respect of —
(a)
all policies covering third parties which are not underwritten by the insurer in the course of, nor incidental to, that business; and
(b)
all direct stand‑alone policies underwritten by the insurer in the course of that business.
(5) For the purposes of paragraphs (1) and (2), the condition is that at all times in the basis period in which the income is derived, all the functions in the following sub‑paragraphs are undertaken by the approved captive insurer, by a company incorporated in Singapore, or by personnel located in Singapore who are employed by a company incorporated outside Singapore:
(a)
either or both of the following:
(i)
ensuring compliance with any requirement or any direction, notice or other document issued under the Insurance Act 1966;
[S 942/2022 wef 31/12/2021]
(ii)
ensuring compliance with any requirement or any direction, notice or other document issued under the Monetary Authority of Singapore Act 1970;
[S 942/2022 wef 31/12/2021]
(b)
ensuring compliance with any requirement relating to financial accounting, auditing and reporting under the Companies Act 1967;
[S 942/2022 wef 31/12/2021]
(c)
the day‑to‑day management of the approved captive insurer’s business.
(6) For the purposes of paragraph (3), where the Comptroller is satisfied that any part of the insurance fund mentioned in the definition of “A” or “B” in regulation 8(3) (as applied by paragraph (4)) is not required to support the offshore captive general business in Singapore or the captive general business in Singapore (other than offshore captive general business) of the approved captive insurer (as the case may be), the Comptroller may adopt such reduced amount of “A” in paragraph (3)(b) or “B” in paragraph (3)(c) as appears to the Comptroller to be reasonable in the circumstances.
(7) For the purposes of paragraph (3), where the Comptroller is satisfied that any part of the shareholders’ fund mentioned in the definition of “C” in regulation 8(3) (as applied by paragraph (4)) is not required to support the captive general business in Singapore of the approved captive insurer, the Comptroller may adopt such reduced amount of “C” in paragraph (3)(d) as appears to the Comptroller to be reasonable in the circumstances.