Clause 10

Every registered insurer shall establish and maintain a separate insurance fund —

for each class of insurance business carried on by the insurer that relates to Singapore policies; and

for each class of insurance business carried on by the insurer that relates to offshore policies.(2) The Authority may require any registered insurer to establish and maintain, in addition to the insurance funds under subsection (1), such other insurance fund as the Authority may determine for different types of policies in respect of each class of business.(3) 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 levies payable by the insurer under section 31B.(4) In the case of an insurance fund established in respect of life business, no part of the fund shall be allocated by way of bonus to participating policies except with the approval of a qualified 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 purposes of this section as reduced by the amount allocated.(5) If on the last statutory valuation in the case of an insurance fund established in respect of life business there was shown a surplus of assets over liabilities of the fund, there may, subject to the approval of a qualified actuary and to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the surplus, and on the making of any such withdrawal that surplus shall be treated for the purposes of this section as reduced by the amount withdrawn:Provided that no part of the surplus attributable to participating policies other than reinsurance policies shall be withdrawn in excess of one quarter of the amount allocated thereout by way of bonus to participating policies.(6) If in the last statutory balance-sheet in the case of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of the fund, there may, subject to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the excess of the surplus over any fund margin of solvency prescribed for that fund under section 10A, and on the making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.(7) In respect of any policy belonging to the insurer’s life business which is under section 9(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.(8) Any amount withdrawn from an insurance fund under subsection (5), (6) or (7) 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.(9) In a winding up, assets comprised in the deposit made by an insurer under section 7 in respect of either class of 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 it sees fit, and assets so allocated shall be treated as assets of that insurance fund, and subsections (3) and (8) shall apply to those assets accordingly.(10) Any insurance fund established by an insurer for any class of 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) Any insurer carrying on insurance business in Singapore on or before the commencement of the Insurance (Amendment) Act 1985 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 —

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 (12); and

all such matters as would subsequently have affected the fund if established at that time shall be brought into account accordingly.(12) The amounts referred to in subsection (11)(a) are as follows:

the amount, determined in the prescribed manner, of the liability of the insurer in respect of the policies referred to in subsection (11);

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

the amount of the fund margin of solvency, if any, required to be maintained for the fund under section 10A.(13) The assets of any insurance fund established by an insurer under this Act shall be kept separate from all other assets of the insurer.Margins of solvency10A.—

Every registered insurer shall maintain —

a fund margin of solvency in respect of each of the insurance funds established by the insurer under this Act; and

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.(2) The Authority may prescribe —

different margins of solvency under subsection (1) for different classes of insurance business and for different types of insurers; and

in respect of any type of insurers, any exception from the requirements of subsection (1).(3) Without prejudice to the generality of section 45, regulations made under this Act may —

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;

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

make different provision in relation to different cases or circumstances.(4) For the purposes of this section —

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

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.”.