Singapore legislation
Section 123
Section 123
Priority of claims of policy owners and specified liabilities
(1)
Where a licensed insurer becomes unable to meet its obligations or becomes insolvent, the assets of the licensed insurer subject to section 16(12), must be available to meet all liabilities in Singapore of the licensed insurer specified in subsection (3), including liabilities which are properly attributable to the business to which an insurance fund relates.
(2)
The liabilities in Singapore of the licensed insurer specified in subsection (3) have priority over all unsecured liabilities of the insurer other than the preferential debts specified in section 203(1) of the Insolvency, Restructuring and Dissolution Act 2018.
(3)
Despite any written law or any rule of law relating to the winding up of companies, in the event of a winding up of a licensed insurer, the following liabilities in Singapore of the licensed insurer (which include liabilities which are properly attributable to the business to which an insurance fund relates) rank in the following order of priority:
firstly, any levy due and payable by the licensed insurer under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011;
secondly, protected liabilities incurred by the licensed insurer, up to the amount paid or payable out of any of the PPF Funds by the PPF Agency under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011 in respect of such protected liabilities and, if applicable, the amount paid or payable out of any of the PPF Funds by the PPF Agency under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011 to fund any transfer or run-off of the business of the licensed insurer or the termination of insured policies issued by the licensed insurer;
thirdly, any liabilities incurred by the licensed insurer in respect of direct policies which are not protected under the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011;
fourthly, any liabilities incurred by the licensed insurer in respect of reinsurance policies;
fifthly, any sum claimed by the trustee of a resolution fund (within the meaning of section 98 of the Monetary Authority of Singapore Act 1970) from the licensed insurer under section 103, 104, 105 or 106 of that Act.
(4)
The liabilities in each class specified in subsection (3) —
rank in the order specified therein but as between liabilities of the same class rank equally between themselves; and
are to be paid in full unless the assets of the licensed insurer are insufficient to meet them in which case they are to abate in equal proportions between themselves.
(5)
In this section, “protected liabilities” has the meaning given by the Deposit Insurance and Policy Owners’ Protection Schemes Act 2011.[49FR