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General restriction on insurers
No person to carry on insurance business unless
registered by Authority
Section 3.
(1) Subject to this Act, no person shall carry on any class of insurance
business in Singapore as an insurer unless the person is registered
by the Authority under this Act in respect of that class of business.
[11/86]
(2) Any person who contravenes subsection (1) shall be guilty of an
offence and shall be liable on conviction to a fine not exceeding $30,000
or to imprisonment for a term not exceeding 3 years or to both and,
in the case of a continuing offence, to a further fine of $2,000 for
every day during which the offence continues after conviction.
[11/86]
Holding out as registered insurer
Section 4. Where any company or firm holds itself out to
be a registered insurer in respect of life business or general business
or both when it is not registered under this Act in respect of that
business, the company or firm shall be guilty of an offence and every
director, manager or officer of the company and the proprietor or
every partner or officer of the firm shall, unless he proves that
the holding out by the company or firm was made without his knowledge
or consent, be guilty of an offence and shall be liable on conviction
to a fine not exceeding $30,000 or to imprisonment for a term not
exceeding 3 years or to both and, in the case of a continuing offence,
to a further fine not exceeding $2,000 for every day during which
the offence continues after conviction.
[22/73;11/86]
Use of word “insurance”
Section 5. (1) No person other than an insurer registered
under this Act shall, without the written consent of the Authority,
use the word “insurance” or any of its derivatives in any language,
or any other word indicating that that person carries on insurance
business in the name, description or title under which it carries
on business in Singapore or make any representation to such effect
in any bill head, letter paper, notice, advertisement or in any other
manner.
[22/73;11/86]
(2) Nothing in this section shall prohibit an association of insurers
from using the word “insurance” or any of its derivatives in any language
as part of its name or description of its activities.
[22/73]
(3) Any person who contravenes subsection (1) shall be guilty of an
offence and shall be liable on conviction to a fine not exceeding $5,000
or to imprisonment for a term not exceeding 12 months or to both and,
in the case of a continuing offence, to a further fine not exceeding
$1,000 for every day during which the offence continues after conviction.
[22/73;11/86]
Prohibition relating to solicitation of insurance
business and establishment of place of business or representative office
Section 6. (1) No person shall solicit any insurance business,
other than reinsurance business, for an insurer who is not entitled
to carry on that business in Singapore.
[30/99]
(2) No person shall, without the written approval of the Authority,
establish —
(a) a place of business to solicit reinsurance business; or
(b) a representative office,
for an insurer who is not entitled to carry on insurance business in
Singapore.
[30/99]
(3) Any person who contravenes subsection (1) or (2) shall be guilty
of an offence and shall be liable on conviction to a fine not exceeding
$20,000 or to imprisonment for a term not exceeding 2 years or to both
and, in the case of a continuing offence, to a further fine not exceeding
$1,000 for every day during which the offence continues after conviction.
[5A
[30/99]
Examination of persons suspected of carrying
on insurance business
Section 7. (1) Whenever the Authority has reason to believe that a
person has contravened any of the provisions of this Act, it may call
for or inspect the books, accounts and records of that person in order
to ascertain whether or not that person has contravened or is contravening
any of the provisions of this Act.
[22/73;11/86;30/99]
(2) Any person who wilfully refuses to submit such books, accounts and
records or to allow the inspection thereof shall be guilty of an offence
and shall be liable on conviction to a fine not exceeding $5,000 or
to imprisonment for a term not exceeding 12 months or to both and, in
the case of a continuing offence, to a further fine not exceeding $1,000
for every day during which the offence continues after conviction.
[6
[22/73]
Registration of Singapore insurers
Registration by Authority
Section 8. (1) A person who desires to carry on insurance business
in Singapore as an insurer shall —
(a) apply in writing to the Authority for registration under this
section; and
(b) furnish such information as the Authority may require.
[11/86]
(2) Upon receiving an application under subsection (1), the Authority
shall consider the application and may, subject to section 9, register
the applicant with or without conditions or refuse to register the applicant.
[11/86]
(3) The Authority may register the applicant as a direct insurer, reinsurer
or captive insurer.
[32/93]
(4) The Authority shall cause notice of any registration or change of
name of a Singapore insurer to be published in the Gazette.
[32/93]
(5) For the purposes of this Act —
"captive insurer" means an insurer whose registration is restricted
to the carrying on of business which consists principally of risks
of its related companies, and includes a rent-a-captive insurer;
"direct insurer" means any insurer other than a reinsurer or a captive
insurer;
"reinsurer" means an insurer whose registration is restricted to the
carrying on of reinsurance business.
[7
[32/93]
Requirements before registration
Section 9. (1) The Authority shall not register any applicant under
section 8 unless the applicant —
(a) is a company as defined in the Companies Act (Cap. 50) or a company
incorporated outside Singapore which has an established place of business
in Singapore or is a society registered under the Co-operative Societies
Act (Cap. 62);
(b) has made the deposit under section 14; and
(c) where it has a share capital its paid-up share capital is, or
where it does not have a share capital the value of its assets exceeds
the amount of its liabilities by, not less than such amount as may
be prescribed.
[11/86]
(2) For the purposes of subsection (1) (c), the Authority may
prescribe different amounts for different classes of insurance business
or for different types of insurers.
[8
[11/86]
Conditions of registration
Section 10. (1) The Authority may at any time add to, vary or revoke
any existing conditions of registration of an insurer or impose any
conditions thereto.
[22/73;11/86]
(2) Any insurer which fails to comply with any of the conditions imposed
by the Authority under subsection (1) or section 8 (2) shall be guilty
of an offence and shall be liable on conviction to a fine not exceeding
$20,000 and, in the case of a continuing offence, to a further fine
not exceeding $1,000 for every day during which the offence continues
after conviction.
[9
[22/73;11/86;30/99]
Annual fees
Section 11. (1) Every registered insurer shall pay to the Authority
such annual fees as may be prescribed.
[11/86]
(2) The Authority may prescribe different annual fees for different
classes of insurance business or for different types of registered insurers.
[11/86]
(3) The Authority may exempt wholly or in part any registered insurer
from the payment of the annual fees prescribed under this section.
[10
[11/86]
Cancellation of registration
Section 12. (1) The Authority may by order, at the request of the insurer
or on any of the grounds set out in subsection (2), cancel the registration
of any insurer either wholly or in respect of a class of business, as
the case may be.
[11/86]
(2) The grounds referred to in subsection (1) are —
(a) that the insurer has not commenced business within 12 months after
being registered;
(b) that the insurer has ceased to carry on insurance business in
respect of any class of business;
(c) that it appears to the Authority that the insurer has failed to
satisfy an obligation to which it is subject by virtue of this Act;
(d) that there exists a ground on which the Authority would be prohibited
by section 9 from registering the insurer;
(e) that the insurer proposes to make, or has made, any composition
or arrangement with its creditors or has gone into liquidation or
has been wound up or otherwise dissolved;
(f) that the insurer is carrying on its business in a manner likely
to be detrimental to the interests of its policy owners;
(g) that the insurer is unable to meet its obligations;
(h) that the insurer has failed to effect satisfactory reinsurance
arrangements;
(i) that the insurer has contravened any of the provisions of this
Act or any regulations made thereunder or any condition imposed or
any direction given by the Authority under this Act;
(j) that any of the officers of the insurer holding a managerial or
executive position has been convicted of any offence under this Act;
(k) that the insurer has furnished false, misleading or inaccurate
information, or has concealed or failed to disclose material facts
in its application for registration; or
(l) that it is in the public interest to cancel the registration.
[11/86]
(3) The Authority shall, before cancelling the registration of an insurer
under this section otherwise than at the request of the insurer, cause
to be given to the insurer notice in writing of its intention to do
so, specifying a date, not less than 14 days after the date of the notice,
upon which the cancellation will take effect and calling upon the insurer
to show cause to the Authority why the registration should not be cancelled.
[11/86]
(4) Notwithstanding the fact that the registration of an insurer has
been cancelled under this section, so long as the insurer remains under
any liability in respect of insurance policies belonging to the class
of insurance business to which the registration relates, the insurer
shall take such action as it considers necessary or as may be required
by the Authority to ensure that reasonable provision has been or will
be made for that liability and that adequate arrangements exist or will
exist for payment of premiums and claims on those policies.
[11/86]
(5) When the Authority has cancelled a registration under this section,
it shall forthwith inform the insurer of the cancellation.
[11/86]
(6) An order of cancellation made by the Authority shall not take effect
until the expiration of a period of 14 days after the Authority has
informed the insurer of the order.
[11
[11/86]
Effects of cancellation of registration
Section 13. (1) Where an order of cancellation becomes effective under
section 12 —
(a) notice of the cancellation shall be published in the Gazette;
and
(b) the insurer shall, as from the date of cancellation, cease to
carry on in Singapore insurance business of the class in respect of
which its registration has been cancelled under this Act, otherwise
than by the collection or receipt of premiums on insurance policies
belonging to that class effected before the date of cancellation of
registration and section 3 shall not apply to the insurer in respect
of the collection or receipt of those premiums.
[22/73;11/86]
(2) Subsection (1) (b) shall not prejudice the enforcement by
any policy owner or person of any right or claim against the insurer
or by the insurer of any right or claim against any policy owner or
person.
[22/73]
(3) If the registration of an insurer has been cancelled or has expired,
sections 36 and 37 shall, unless the Authority otherwise directs, continue
to apply in relation to the insurer in respect of matters that occurred
before the cancellation or expiry as if his registration had not been
cancelled or had not expired, as the case may be.
[12
[30/99]
Deposits, registers of policies and insurance
funds
Deposits
Section 14. (1) A Singapore insurer, while registered in respect of
any class of insurance business, shall at all times have in respect
of that class of business a deposit with the Authority of a value of
not less than $500,000 or such other amount as may be prescribed.
[11/86;32/93]
(2) A deposit under subsection (1) shall be made in assets of such nature
as the Authority may specify.
[11/86]
(3) All income accruing in respect of a deposit shall be payable to
the insurer making the deposit.
(4) A deposit made under this section in respect of any class of insurance
business shall be retained by the Authority until either —
(a) the insurer ceases to be registered in respect of that class of
insurance business; or
(b) the deposit is required in the winding up of the affairs of the
insurer.
(5) If the insurer ceases to be registered in respect of any class of
insurance business, the deposit or part thereof may be further retained
for the purpose of and in accordance with any such provision for liabilities
in respect of policies as is required by section 12 (4).
(6) Where the value of the deposit made by an insurer under subsection
(1) in respect of any class of insurance business is less than $500,000
or the amount prescribed at any time, the Authority may, by notice in
writing, direct the insurer to add thereto within 28 days of the service
of the notice such assets as the Authority may specify of a value not
less than the difference.
[32/93]
(7) An insurer which has made a deposit under this section may, at any
time, substitute for any assets comprised in the deposit such other
assets as the Authority may specify so long as the value of the deposit
is not thereby reduced to an amount below that which is required by
this Act.
[13
Bank covenants in lieu of deposits
Section 15. (1) If, in the case of any insurer, a bank licensed under
any written law for the time being in force relating to banking makes
with the Authority an agreement in a form approved by the Authority
whereby the bank covenants to deposit with the Authority a specified
sum in cash on account of the insurer’s deposit under section 14 in
respect of either class of insurance business, and the covenant complies
with any requirement the Authority sees fit to impose as to the circumstances
in which that sum is to be deposited, then, for the purposes of this
Act, the insurer shall be treated as having made the deposit under that
section and the sum so covenanted for shall be recoverable notwithstanding
that no consideration is furnished on the agreement.
[11/86]
(2) Any sum deposited by a bank in pursuance of an agreement made under
subsection (1) shall be dealt with under or for the purposes of this
Act as if it were a sum deposited by the insurer under section 14.
[14
Register of policies
Section 16.
(1) Every registered insurer shall establish and keep —
(a) a register of Singapore policies where it carries on business
relating to Singapore policies; and
(b) a register of offshore policies where it carries on business relating
to offshore policies.
[11/86]
(2) Subject to this section, there shall be entered in the register
of Singapore policies all Singapore policies of the insurer and in the
register of offshore policies all offshore policies of the insurer,
and no policy entered in any register shall be removed from it so long
as the insurer is under any liability in respect of that policy.
[11/86]
(3) Subject to this section, there may be entered in the register of
Singapore policies such other policies as the insurer, with the consent
(express or implied) of the policy owners, may determine, and this Act
shall apply in relation to any policy so entered as if it were a Singapore
policy.
[11/86]
(4) Subject to subsection (5), an insurer carrying on life business
outside Singapore (and not doing so only by the collection or receipt
of premiums) may, at the request of the policy owner of a policy belonging
to the insurer’s life business —
(a) refrain from entering the policy in the register of Singapore
policies, notwithstanding that it is a Singapore policy; or
(b) remove the policy from the register of Singapore policies,
and this Act shall thereafter apply in relation to the policy as if
it were not a Singapore policy.
[11/86]
(5) Regulations may provide that subsection (3) or (4) shall apply only
in such cases as may be prescribed or shall have effect subject to any
prescribed exceptions or restrictions.
[11/86]
(6) A Singapore insurer shall, at the request of any person having an
interest in any policy of the insurer, inform him whether or not the
policy is entered in any register of policies established by the insurer
under this Act.
[11/86]
(7) Where a Singapore insurer has established under this Act any register
of policies, the register shall cease to exist as a statutory register
under this Act of policies belonging to either class of insurance business,
if the insurer ceases to be registered under this Act in respect of
that class of business; and any reference in this Act to policies registered
under this Act shall be construed accordingly.
[11/86]
(8) Subject to subsection (7), any register of policies established
by a Singapore insurer shall, notwithstanding that the insurer at any
time ceases to carry on in Singapore either class of insurance business,
continue to be maintained by the insurer for policies belonging to that
class so long as the insurer is under any liability in respect of those
policies registered or required to be registered at that time; but no
policies belonging to either class of insurance business shall be entered
in the register under subsection (3) when the insurer is not carrying
on that class of business in Singapore, or is doing so only by the collection
or receipt of premiums.
[11/86]
(9) A register of policies established and kept by an insurer under
this section before 1st January 1987 shall be deemed to be a register
of Singapore policies under subsection (1).
[15
[11/86]
Establishment of insurance funds and allocation
of surplus
Section 17. (1) Every registered insurer shall establish and maintain
a separate insurance fund —
(a) for each class of insurance business carried on by the insurer
that relates to Singapore policies; and
(b) for each class of insurance business carried on by the insurer
that relates to offshore policies.
[11/86]
(2) If, in the case of a direct insurer registered to carry on life
business, no part of the surplus of assets over liabilities from its
non-participating policies is allocated by the insurer by way of bonus
to its participating policies, the insurer shall, in addition to the
insurance funds under subsection (1) and subject to such conditions
as the Authority may impose, establish and maintain a separate insurance
fund —
(a) for its participating policies; and
(b) for its non-participating policies.
[32/93]
(3) The Authority may require any registered insurer to establish and
maintain, in addition to the insurance funds under subsections (1) and
(2), such other insurance fund as the Authority may determine for different
types of policies in respect of each class of insurance business.
[11/86;32/93]
(4) There shall be paid into an insurance fund all receipts of the insurer
properly attributable to the business to which the fund relates (including
the income of the fund), and the assets comprised in the fund shall
be applicable only to meet such part of the insurer’s liabilities and
expenses as is properly so attributable but shall not be applied to
meet any levy payable by the insurer under section 46.
[11/86]
(5) In the case of an insurance fund which comprises wholly or partly
of participating life policies, no part of the fund shall be allocated
by way of bonus to those policies except with the approval of an actuary
and out of a surplus of assets over liabilities as shown on the last
statutory valuation of the fund; and on the making of any such allocation
that surplus shall be treated for the purposes of this section as reduced
by the amount allocated.
[32/93]
(6) Subject to subsection (7), if, on the last statutory valuation in
the case of an insurance fund which comprises wholly or partly of participating
life policies, there was shown a surplus (as reduced under subsection
(5)) of assets over liabilities of the fund, there may, subject to the
approval of an actuary and to any provision to the contrary in any instrument
or contract binding the insurer, be allocated to the shareholders or
withdrawn from the fund an amount not exceeding the surplus, and, on
the making of any such allocation, that surplus shall be treated for
the purposes of this section as reduced by the amount allocated.
[32/93]
(7) No part of the surplus shall be allocated under subsection (6) in
any year in excess of the relevant percentage of the sum of —
(a) the amount allocated in accordance with subsection (6); and
(b) the amount allocated thereout by way of bonus to participating
life policies in accordance with subsection (5) within that year.
[32/93]
(8) For the purposes of subsection (7), the relevant percentage in relation
to 1997 and any subsequent year is 10%.
[32/93]
(9) If, on the last statutory valuation in the case of an insurance
fund established wholly in respect of non-participating life policies,
there was shown a surplus of assets over liabilities of the fund, there
may, subject to any provision to the contrary in any instrument or contract
binding the insurer, be withdrawn from the fund an amount not exceeding
the surplus, and, on the making of any such withdrawal, that surplus
shall, for the purposes of this section, be treated as reduced by the
amount withdrawn.
[32/93]
(10) If, in the last statutory balance-sheet in the case of an insurance
fund established in respect of general business, there was shown a surplus
of assets over liabilities of the fund, there may, subject to any provision
to the contrary in any instrument or contract binding the insurer, be
withdrawn from the fund an amount not exceeding the excess of the surplus
over any fund margin of solvency prescribed for that fund under section
18, and, on the making of any such withdrawal, that surplus shall, for
the purposes of this section, be treated as reduced by the amount withdrawn.
[11/86]
(11) In respect of any policy belonging to the insurer’s life business
which is, under section 16 (4), removed from the insurer’s register
of Singapore policies, there may be withdrawn from an insurance fund
to which the policy relates an amount not exceeding the prescribed amount.
[11/86]
(12) Any amount withdrawn from an insurance fund under subsection (6),
(9), (10) or (11) and, in a winding up, any part of an insurance fund
remaining after meeting the liabilities and expenses to which the fund
is applicable may be dealt with as if it had not formed part of the
fund except that, in the case of a winding up where any other insurance
fund of the insurer under this Act is in deficit, the surplus remaining
after the winding up shall first be applied to make good the deficit
in that fund.
[11/86;32/93]
(13) In a winding up, assets comprised in the deposit made by an insurer
under section 14 in respect of either class of insurance business may
be allocated by the Authority to any insurance fund established by the
insurer for that class of business in such manner and proportion as
the Authority sees fit, and assets so allocated shall be treated as
assets of that insurance fund, and subsections (4) and (12) shall apply
to those assets accordingly.
[11/86]
(14) Any insurance fund established by an insurer for any class of insurance
business shall, notwithstanding that the insurer at any time ceases
to carry on that class of business in Singapore, continue to be maintained
by the insurer so long as the insurer is required by this Act to maintain
a register of policies for policies belonging to that class.
[11/86]
(15) Any insurer carrying on insurance business in Singapore on or before
1st January 1987 which is required under subsection (1) to establish
an insurance fund for offshore policies shall do so at the time of establishment
of the insurer’s register of offshore policies, and by reference to
the policies registered or required to be registered in it as at its
establishment, and by reference to the assets and liabilities of the
insurer as at that time; and —
(a) there shall be allocated to the fund assets of a value of not
less (after allowing for any charges to which the fund is not applicable)
than the aggregate of the amounts specified in subsection (16); and
(b) all such matters as would subsequently have affected the fund
if established at that time shall be brought into account accordingly.
[11/86]
(16) The amounts referred to in subsection (15) (a) are as follows:
(a) the amount, determined in the prescribed manner, of the liability
of the insurer in respect of the policies referred to in subsection
(15);
(b) the amount of any other liabilities of the insurer in so far as
the assets allocated to the fund will be applicable or be treated
as having been applicable to meet those liabilities; and
(c) the amount of the fund margin of solvency, if any, required to
be maintained for the fund under section 18.
[11/86]
(17) The assets of any insurance fund established by an insurer under
this Act shall be kept separate from all other assets of the insurer.
[16
[11/86]
Margins of solvency
Section 18.
(1) Every registered insurer shall maintain —
(a) a fund margin of solvency in respect of each of the insurance
funds established by the insurer under this Act; and
(b) a margin of solvency,
of such amounts as may be prescribed or determined in accordance with
regulations made under this Act for the purposes of this section.
[11/86]
(2) The Authority may prescribe —
(a) different margins of solvency under subsection (1) for different
classes of insurance business and for different types of insurers;
and
(b) in respect of any type of insurers, any exception from the requirements
of subsection (1).
[11/86]
(3) Without prejudice to the generality of section 64, regulations made
under this Act may —
(a) provide for the determination of the value of assets and the amount
of liabilities in any case in which the value or amount is required
by this section to be determined in accordance with valuation regulations;
(b) provide that, for any specified purpose, assets or liabilities
of any specified class or description shall be left out of account
or shall be taken into account only to a specified extent; and
(c) make different provision in relation to different cases or circumstances.
[11/86]
(4) For the purposes of this section —
(a) the fund margin of solvency in respect of any insurance fund is
the excess of the value of the assets over the liabilities of that
fund; and
(b) the margin of solvency of a registered insurer is the excess of
the value of its assets over the amount of its liabilities,
that value and amount being determined in accordance with any applicable
valuation regulations.
[17
[11/86]
Form, investment and situation of assets
Section 19. Regulations made under this Act may make provision for securing
that, in such circumstances and to such extent as may be prescribed
—
(a) the assets of any insurance fund of a registered insurer are invested
in such manner and maintained in such places as may be prescribed;
and
(b) the nature of the assets is appropriate in relation to the currency
in which the liabilities of the insurer are or may be required to
be met.
[18
[11/86]
Requirements as to documents evidencing title
to assets of insurance funds
Section 20. (1) Where an insurer has established an insurance fund
under this Act, the insurer shall secure that any document evidencing
the insurer’s title to assets of the fund, so long as the document is
held by or on behalf of the insurer, shall be kept in Singapore or,
if not so kept, shall be kept in the custody of a person approved by
the Authority, and at a place and on terms so approved.
[11/86]
(2) An insurer who has established an insurance fund under this Act
shall from time to time notify the Authority in writing —
(a) the person having the custody of any such document on behalf of
the insurer, and the fact of any person ceasing to do so; and
(b) the reason why any such document is not held by or on behalf of
the insurer, and the identity of the document in question.
[11/86]
(3) Any such document which is, for the time being, held by or on behalf
of the insurer shall, on the Authority giving not less than 14 days’
notice in writing to the insurer or to the person having the custody
of the document, be produced for inspection to the Authority or a person
nominated by it by the person to whom the notice is given.
[11/86]
(4) A person who fails to comply with this section shall be guilty of
an offence and shall be liable on conviction to a fine not exceeding
$5,000 and, in the case of a continuing offence, to a further fine not
exceeding $1,000 for every day during which the offence continues after
conviction.
[19
[11/86]
Maintenance of assets in Singapore
Section 21. (1) Where the Authority is satisfied that there exists
a ground on which the Authority would be empowered by section 12 to
cancel the registration of an insurer, the Authority may require that
assets of the insurer of a value which at any time is equal to the whole
or a specified proportion of the amount of its domestic liabilities
shall be maintained in Singapore.
[11/86]
(2) The Authority may direct that, for the purposes of any requirement
under this section, assets of a specified class or description shall
or shall not be treated as assets maintained in Singapore.
[11/86]
(3) The Authority may direct that, for the purposes of any requirement
under this section, the domestic liabilities of a registered insurer,
or such liabilities of any class or description, shall be taken to be
the net liabilities after deducting any part of them which is reinsured.
[11/86]
(4) A requirement imposed under this section may be framed so as to
come into effect immediately after the day on which it is imposed or
so as to come into effect after the expiration of a specified period
or such longer period as the Authority may allow.
[11/86]
(5) In this section, any reference to a domestic liability is a reference
to a liability of the insurance business carried on by the registered
insurer in Singapore, including the margins of solvency prescribed under
section 18.
[11/86;32/93]
(6) Subject to subsection (7), in computing the amount of any liabilities
for the purposes of this section, all contingent and prospective liabilities
shall be taken into account but not liabilities in respect of share
capital.
[11/86]
(7) For the purposes of this section, the value of any assets and the
amount of any liabilities shall be determined in accordance with any
valuation regulations made under this Act.
[20
[11/86]
Custody of assets
Section 22. (1) The Authority may, in the case of a registered insurer
on which a requirement has been imposed under section 21, impose an
additional requirement that the whole or a specified proportion of the
assets to which the requirement under that section applies shall be
held by a person approved by the Authority for the purposes of the requirement
under this section as trustee for the insurer.
[11/86]
(2) Section 21 (4) shall apply to a requirement under this section.
[11/86]
(3) Assets of a registered insurer held by a person as trustee for the
insurer shall be taken to be held by him in compliance with a requirement
imposed under this section if, and only if —
(a) they are assets in whose case the insurer has given him written
notice that they are to be held by him in compliance with such a requirement;
or
(b) they are assets into which assets in whose case the insurer has
given him such written notice have, by any transaction or series of
transactions, been transposed by him on the instructions of the insurer.
[11/86]
(4) No assets held by a person as trustee for a registered insurer in
compliance with a requirement imposed under this section shall, so long
as the requirement is in force, be released except with the consent
of the Authority.
[11/86]
(5) If a mortgage or charge is created by a registered insurer at a
time when there is in force a requirement imposed on the insurer by
virtue of this section, being a mortgage or charge conferring a security
on any assets which are held by a person as trustee for the insurer
in compliance with the requirement, the mortgage or charge shall, to
the extent that it confers such a security, be void against the liquidator
and any creditor of the insurer.
[21
[11/86]
Miscellaneous requirements as to conduct of business
Payment in Singapore currency of policy moneys
under life policies
Section 23. In the case of a life policy issued as a Singapore policy
after 1st January 1967, to a policy owner who is a citizen of Singapore,
any policy moneys or moneys payable on the surrender of the policy shall,
notwithstanding anything in the policy or in any agreement relating
thereto, be paid in the currency of Singapore unless at the time of
payment it is otherwise agreed between the insurer and the person entitled
to payment.
[22
Regulation of premiums under life policies
Section 24. (1) A Singapore insurer shall not issue a life policy of
any description, being a Singapore policy or an offshore policy, if
the premium chargeable under the policy is not in accordance with rates
fixed with the approval of an actuary or, where no rates have been so
fixed for policies of that description issued by the insurer, is not
a premium approved for the policy by an actuary.
[11/86;32/93]
(2) An actuary shall not for the purposes of this section approve a
premium for a policy, or a rate of premium for any description of policy,
unless he is satisfied that it is suitable and in accordance with sound
insurance principles.
(3) An actuary in giving his approval in respect of any description
of life policy shall have regard to the maximum rate of commission proposed
to be paid or allowed to any person in respect of that description of
policy, and shall certify the maximum rate.
(4) Where in the case of any insurer a rate of premium is approved by
an actuary for any description of life policy, the insurer shall not,
except with the approval of the Authority, pay or allow in respect of
any policy of that description a commission at a rate greater than the
maximum rate of commission certified by the actuary.
[11/86;32/93]
(5) The Authority may, by notice in writing, require any Singapore insurer
to obtain and furnish it within the time specified in the notice with
a report by an actuary as to the suitability of the rates of premium
for the time being chargeable by the insurer for any description of
life policy, and if the actuary considers that the rates are not suitable
or not in accordance with sound insurance principles, a report as to
the rates of premium which the actuary approves for that description
of policy.
[11/86;32/93]
(6) For the purposes of subsection (1), regard shall be had to any such
report referred to in subsection (5) to the exclusion of any previous
approval or report.
(7) For each occasion on which an insurer issues a policy or allows
a commission in contravention of this section, the insurer shall be
guilty of an offence and shall be liable on conviction to a fine not
exceeding $5,000.
[23
[11/86]
Control of form of proposals, policies and
brochures
Section 25. (1) The Authority may, by notice in writing, require a
Singapore insurer to submit to it —
(a) the forms of proposal and policy for the time being in use by
the insurer in Singapore; and
(b) any brochure which is for the time being in use by the insurer
for describing the terms or conditions of, or the benefits to be or
likely to be derived from, policies.
[11/86]
(2) Where the whole or part of any such form or brochure required under
subsection (1) is not in English, there shall be submitted with it a
translation in English.
[11/86]
(3) A requirement under this section, unless it is otherwise provided
therein, shall apply to all such forms and brochures coming into use
after the making of the requirement and before the Authority notifies
the insurer that the requirement is withdrawn.
[11/86]
(4) If it appears to the Authority, after affording the insurer an opportunity
to make representations orally or in writing, that any such form or
brochure —
(a) contravenes or fails to comply with any of the provisions of this
Act; or
(b) is in any respect likely to mislead,
the Authority may, by notice in writing, direct the insurer to discontinue
the use of the form or brochure in Singapore either forthwith or from
a date specified in the notice.
[11/86]
(5) No Singapore insurer shall, use in the course of carrying on insurance
business in Singapore, a form of proposal which does not have prominently
displayed therein a warning that if a proposer does not fully and faithfully
give the facts as he knows them or ought to know them, he may receive
nothing from the policy.
[11/86]
(6) For each occasion on which any insurer uses a copy of a form or
brochure in contravention of subsection (4) or (5), the insurer shall
be guilty of an offence and shall be liable on conviction to a fine
not exceeding $5,000.
[11/86]
(7) In this section, “brochure” includes any leaflet, circular or similar
advertising matter, whether printed or not.
[24
Requirements as to prospectuses and statements
of capital
Section 26. (1) In any case where, under section 50 of the Companies
Act (Cap. 50), it is unlawful to issue, circulate or distribute a prospectus
relating to a company without a copy of it being first registered under
that Act, it shall also be unlawful, in the case of a company registered
or intended to be registered as an insurer under this Act, to do so
without the prospectus having been sanctioned by the Authority.
[11/86]
(2) Any person knowingly responsible for the issue, circulation or distribution
of a prospectus in contravention of subsection (1) shall be guilty of
an offence and shall be liable on conviction to a fine not exceeding
$10,000.
[11/86]
(3) In subsections (1) and (2), “prospectus” includes any document to
which the expression applies in section 50 of the Companies Act.
(4) Where a notice, advertisement or other official publication of a
company registered or intended to be registered as an insurer under
this Act, contains a statement of the company’s authorised share capital,
and does not state therewith how much of that capital has been subscribed
and how much is paid up, the company shall be guilty of an offence and
shall be liable on conviction to a fine not exceeding $5,000.
[25
[11/86]
Control of take-overs of insurers incorporated
in Singapore
Section 27. (1) This section and sections 28 and 29 shall apply to
and in relation to all natural persons whether resident in Singapore
or not and whether citizens of Singapore or not, and to all bodies corporate
or unincorporate, whether incorporated or carrying on business in Singapore
or not.
[11/86]
(2) No person shall, after 1st January 1987, enter into an agreement
to acquire shares of a registered insurer that is incorporated in Singapore
by virtue of which he would, if the agreement is carried out, obtain
effective control of that insurer without first notifying the Authority
of his intention to enter into the agreement and obtaining the approval
of the Authority to his entering into the agreement.
(3) Any person who contravenes subsection (2) shall be guilty of an
offence and shall be liable on conviction to a fine not exceeding $50,000
or to imprisonment for a term not exceeding 3 years or to both.
(4) For the purposes of this section —
(a) a person shall be regarded as obtaining effective control of a
registered insurer by virtue of an agreement if the person alone or
acting together with any associate or associates would, if the agreement
is carried out —
(i) acquire or hold, directly or indirectly, 20% or more of the
issued share capital of the insurer; or
(ii) control, directly or indirectly, 20% or more of the voting
power of the insurer;
(b) a reference to entering into an agreement to acquire shares includes
—
(i) a reference to a person making or publishing a statement, however
expressed, that expressly or impliedly invites a holder of shares
to offer to dispose of his shares to that person;
(ii) a reference to a person obtaining a right to acquire shares
under an option, or to have shares transferred to himself or to
his order, whether the right is exercisable presently or in the
future and whether on the fulfilment of a condition or not;
(c) a reference to the voting power in a registered insurer is a reference
to the total number of votes that might be cast in the general meeting
of the insurer; and
(d) the following persons are associates of a person:
(i) the person’s spouse or parent or remoter lineal ancestor, son,
daughter or remoter issue, brother or sister of the person;
(ii) any partner of the person;
(iii) any corporation of which the person is an officer;
(iv) where the person is a corporation, any officer of the corporation;
(v) any employee or employer of the person;
(vi) any officer of any corporation of which the person is an officer;
(vii) any employee of a natural person of whom the person is an
employee;
(viii) any corporation whose directors are accustomed or under an
obligation, whether formal or informal, to act in accordance with
the directions, instructions or wishes of the person or, where the
person is a corporation, of the directors of the person;
(ix) any corporation in accordance with the directions, instructions
or wishes of which, or of the directors of which, the person is
accustomed or under an obligation, whether formal or informal, to
act;
(x) any corporation in which the person is in a position to control
not less than 20% of the voting power in the corporation; and
(xi) where the person is a corporation, a person who is in a position
to control not less than 20% of the voting power in the corporation.
[26
[30/99]
Arrangements affecting control of insurers
incorporated in Singapore
Section 28. (1) No person shall enter into any arrangement in relation
to any registered insurer that is incorporated in Singapore by virtue
of which he would, if the arrangement is carried out, obtain control
of the insurer without first notifying the Authority of his intention
to enter into the arrangement and obtaining the approval of the Authority
to his entering into the arrangement.
[11/86]
(2) Any person who contravenes subsection (1) shall be guilty of an
offence and shall be liable on conviction to a fine not exceeding $50,000
or to imprisonment for a term not exceeding 3 years or to both.
(3) For the purposes of this section —
(a) a person shall be regarded as entering into an arrangement by
virtue of which he would obtain control of a registered insurer if
he alone or acting together with an associate or associates would
be in a position to determine the policy of the insurer;
(b) the reference to entering into any arrangement is a reference
to any formal or informal scheme, arrangement or understanding, whether
expressly or by implication and without limiting the generality of
the foregoing includes a reference —
(i) creating a trust whether express or implied; and
(ii) entering into a transaction or agreement,
and references to an arrangement shall be construed accordingly; and
(c) the reference to associates of a person has the same reference
as under section 27.
[27
Control of substantial shareholdings of insurers
incorporated in Singapore
Section 29. (1) No person shall enter into any agreement to acquire
shares of a registered insurer that is incorporated in Singapore by
virtue of which he would, if the agreement is carried out, become a
substantial shareholder of that insurer without first notifying the
Authority of his intention to enter into the agreement and obtaining
the approval of the Authority to his entering into the agreement.
[30/99]
(2) Any person who contravenes subsection (1) shall be guilty of an
offence and shall be liable on conviction to a fine not exceeding $10,000
or to imprisonment for a term not exceeding 12 months or to both.
(3) For the purposes of this section —
(a) “substantial shareholder”, in relation to an insurer, means a
person who holds 5% or more of the voting power of the insurer;
(b) a reference to entering into an agreement to acquire shares shall
be construed in the same way as under section 27; and
(c) “voting power” shall have the same meaning as in section 27.
[28
[30/99]
Power of Authority to require an insurer
incorporated in Singapore to obtain information as to beneficial interests
in shares of insurer
Section 30. (1) The Authority may, by notice in writing, direct a registered
insurer that is incorporated in Singapore to obtain from any shareholder
of the insurer and to transmit to the Authority information —
(a) as to whether that shareholder holds any voting shares in the
insurer as beneficial owner or as trustee; and
(b) if he holds them as trustee, to indicate as far as it can the
person for whom he holds them (either by name or by other particulars
sufficient to enable those persons to be identified) and the nature
of their interests,
and the insurer shall comply with that direction within such time as
is specified in the notice.
[11/86]
(2) For the purposes of this section, “voting shares” has the same meaning
as in the Companies Act (Cap. 50).
[29
Approval of directors and principal officers
of insurers
Section 31. (1) No registered insurer —
(a) shall appoint a person as principal officer of the insurer in
Singapore; or
(b) incorporated or established in Singapore shall appoint a person
as director of the insurer,
unless the insurer satisfies the Authority that that person is a fit
and proper person to be so appointed and has obtained the approval of
the Authority.
[11/86]
(2) A direct insurer registered to carry on life business shall appoint
a person as an actuary of the insurer to perform such duties as may
be prescribed.
[32/93]
(3) The appointment of the actuary by a direct insurer under subsection
(2) shall be made by the board of directors of the insurer in writing
and shall be subject to the approval of the Authority.
[32/93]
(4) Any person aggrieved by any decision of the Authority under subsection
(1) or (3) may appeal to the High Court.
[32/93]
(5) In this section —
"director" has the same meaning as in the Companies Act (Cap. 50);
"principal officer" , in relation to a registered insurer, means any
person by whatever name called employed by the insurer to be directly
responsible for the conduct of any class of insurance business of
the insurer in Singapore.
[30
Restriction on granting of unsecured loans
or advances to directors and employees of insurers
Section 32. (1) No registered insurer shall in respect of its business
in Singapore grant, directly or indirectly, unsecured loans or advances
—
(a) to a director of the insurer which in the aggregate and outstanding
at any one time exceed the sum of $5,000; or
(b) to an employee of the insurer which in the aggregate and outstanding
at any time exceed one year’s emolument of that employee.
[32/93;30/99]
(2) For the purpose of this section, “director” includes the wife, husband,
father, mother, son or daughter of a director.
[31
General obligation to furnish information
Section 33. The Authority may, by notice in writing, require any Singapore
insurer to furnish it with information about any matter related to any
business carried on by the insurer in Singapore or elsewhere, if, in
the opinion of the Authority, it requires that information for the discharge
of its functions under this Act.
[32
[11/86]
Subsidiary
Carrying on of general business by Lloyd’s
underwriters
Section 34. (1) Section 3 shall not prevent general business being
carried on in Singapore by any person if he carries it on as a Lloyd’s
underwriter and if the conditions of this section are complied with.
[30/99]
(2) Subsection (1) shall not authorise a Lloyd’s underwriter to carry
on insurance business in Singapore unless there are one or more persons
resident in Singapore who are authorised to accept service of notices
and legal process on behalf of Lloyd’s underwriters, being persons nominated
for that purpose by Lloyd’s.
[30/99]
(3) Lloyd’s shall notify the Authority in writing of any nomination
referred to in subsection (2) and of any person ceasing to be nominated.
[30/99]
(4) Subsection (1) shall not authorise a Lloyd’s underwriter to carry
on insurance business in Singapore unless Lloyd’s makes and maintains
with the Authority the deposit as mentioned in the Second Schedule,
and that Schedule shall have effect in relation thereto.
[30/99]
(5) Any deposit required by this section may be applied by the Authority
in meeting claims against Lloyd’s underwriters in respect of Singapore
policies.
[30/99]
(6) In every year there shall be furnished to the Authority on behalf
of Lloyd’s, if in the preceding year Lloyd’s underwriters have carried
on business as Singapore insurers by virtue of this section —
(a) a certificate, signed by the chairman or other presiding officer
of Lloyd’s and by or on behalf of the Minister or other public authority
as has the administration of the law relating to insurance in the
country in which Lloyd’s is constituted, whether or not those Lloyd’s
underwriters have in respect of the preceding year complied with that
law so far as applicable to them;
(b) a certified copy of such returns for the preceding year relating
to insurance business carried on by those Lloyd’s underwriters as
are required by the law referred to in paragraph (a) to be
furnished to the Minister or public authority; and
(c) the latest annual list of Lloyd’s underwriters and of the governing
body of Lloyd’s.
[30/99]
(7) For the purposes of this Act —
"Lloyd’s" means the society of underwriters known in the United Kingdom
as Lloyd’s and incorporated under the Lloyd’s Act 1871;
"Lloyd’s underwriter" means an underwriting member of Lloyd’s.
[36
[30/99]
Saving for validity of policies
Section 35. Nothing in this Part shall operate to invalidate any policy.
[37
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