Clause 5

by inserting, immediately after subsection (1), the following subsection:“(1A) 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 —

for its participating policies; and

for its non-participating policies.”;

by deleting the words “subsection (1)” in the third line of subsection (2) and substituting the words “subsections (1) and (1A)”;

by deleting subsections (4) and (5) and substituting the following subsections:“(4) 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.(5) Subject to subsection (5A), 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 (4)) 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to any provision to the contrary in any instrument or contract binding the insurer, be allocated to the shareholders or withdrawn from the fund an amount not exceeding the surplus, and on the making of any such allocation that surplus shall be treated for the purposes of this section as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.(5A) No part of the surplus shall be allocated under subsection (5) in any year in excess of the relevant percentage of the sum of —

the amount allocated in accordance with subsection (5); and

the amount allocated thereout by way of bonus to participating life policies in accordance with subsection (4) within that year.(5B) For the purposes of subsection (5A), the relevant percentage —

in relation to 1993 is 18%;

in relation to 1994 is 16%;

in relation to 1995 is 14%;

in relation to 1996 is 12%; and

in relation to 1997 and any subsequent year is 10%.(5C) 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.”; and

by inserting, immediately after the words “subsection (5),” in subsection (8), the word “(5C),”.