Clause 17

by deleting the words “section 34A” in subsection (1) and substituting the words “sections 34A and 34AA”;

by deleting subsection (2) (including the subsection heading) and substituting the following subsection heading and subsection:“Separate accounts to be maintained for various businesses(2) An insurer must maintain separate accounts for income derived by it from carrying on each of the following businesses:

onshore life business;

offshore life business;

the business (other than the business of life assurance) of insuring and reinsuring onshore risks;

the business (other than the business of life assurance) of insuring and reinsuring offshore risks.”;

by deleting paragraphs (b) and (c) of subsection (3) and substituting the following paragraph:“(b)either —

deducting from the balance so arrived at the net increase between the beginning and ending values of the period for which the gains or profits are ascertained, of the liabilities of the insurer in respect of policies other than life policies, both values being determined in accordance with the Insurance Act (Cap. 142); or

adding to the balance so arrived at the net decrease between the beginning and ending values of the period for which the gains or profits are ascertained, of the liabilities of the insurer in respect of policies other than life policies, both values being determined in accordance with the Insurance Act; and”;

by deleting the words “offshore risks or any other risks” in subsection (4) and substituting the words “any risks”;

by deleting the words “income from premiums or” in subsection (4)(a) and substituting the words “underwriting income or income”;

by inserting, immediately after subsection (4), the following subsection:“(5) For the purposes of subsection (3)(b), if, during the period for which the gains or profits are ascertained, any insurance business (excluding life business) is transferred by or to the insurer, then —

in a case where the business is transferred by the insurer, the liabilities of the insurer immediately before the date of the transfer, in respect of policies that form part of that business, are to be added to the ending value mentioned in that provision; and

in a case where the business is transferred to the insurer, the liabilities of the transferor immediately before the date of the transfer, in respect of policies that form part of that business, are to be added to the beginning value mentioned in that provision.”;

by inserting, immediately before the words “life insurance surplus” in subsection (6)(a)(v), the word “onshore”;

by deleting the word “; and” at the end of subsection (6)(c)(v) and substituting a full‑stop;

by deleting sub‑paragraph (vi) of subsection (6)(c);

by deleting the words “Notwithstanding subsection (6), in the case of a life insurer which has income subject to tax at the concessionary rate of tax prescribed by regulations made under section 43C, in ascertaining the income for the purposes of those regulations —” in subsection (7) and substituting the words “Despite subsection (6), where a life insurer is approved under section 43C before 1 June 2017 and its income is subject to tax at the concessionary rate by regulations made under section 43C(1)(a), the following paragraphs apply for the purposes of ascertaining that income:”;

by inserting, immediately after subsection (7), the following subsection:“(7A) Despite subsection (6), where a life insurer is approved under section 43C on or after 1 June 2017 and its income is subject to tax at a concessionary rate by regulations made under section 43C(1)(aa), the following paragraphs apply for the purposes of ascertaining that income:

only such part of the following income relating to reinsurance policies as may be specified in those regulations may be included:

the onshore life insurance surplus, and offshore life insurance surplus (as the case may be), of the insurer; (ii)the income of the shareholders’ fund established in Singapore attributable to the insurer’s onshore life reinsurance business and offshore life reinsurance business (as the case may be); (b)the income in paragraph (a) and any item of expenditure not directly incurred in the production of such income must be apportioned in the manner prescribed (if any) by those regulations.”;

by inserting, immediately after “(7)” in subsection (9), “, (7A)”;

by deleting the definition of “life insurance surplus” in subsection (12) and substituting the following definition:“ “life insurance fund” means the insurance fund established and maintained by an insurer under section 17(1) of the Insurance Act for its life business;”; (n)by deleting the words “established and maintained under the Insurance Act, not being a Singapore policy within the meaning of that Act” in the definition of “offshore life business” in subsection (12) and substituting the words “, not being a Singapore policy within the meaning of the Insurance Act”;

by deleting the words “established and maintained under the Insurance Act” in paragraphs (a)(i), (ii) and (iii) and (b)(iv) of the definition of “offshore life insurance surplus” in subsection (12);

by deleting the words “that Act” in paragraphs (a)(ii) and (b)(iv) of the definition of “offshore life insurance surplus” in subsection (12) and substituting in each case the words “the Insurance Act”;

by inserting, immediately after the definition of “offshore life insurance surplus” in subsection (12), the following definitions:“ “offshore life insurance surplus”, in relation to an insurer under subsection (7A)(a)(i), means the amount ascertained by taking the following steps:

add the following:

the gross premiums (including consideration paid or payable for the purchase of annuities) from its offshore non‑participating reinsurance policies of any life insurance fund (less any premiums returned to the insured and premiums paid or payable on reinsurance);

the net decrease between the beginning and ending values of the policy liabilities of the part of any life insurance fund relating to its offshore non‑participating reinsurance policies for the period for which the gains or profits are ascertained, both values being determined in accordance with the Insurance Act;

the investment income and gains or profits derived from the sale of investments and other income, whether derived from Singapore or elsewhere, of the part of any life insurance fund relating to its offshore non‑participating reinsurance policies;

subtract from the total under paragraph (a), all of the following:

distribution expenses and management expenses incurred in the production of the income in paragraph (a) and, in respect of a branch in Singapore, a fair proportion of the expenses of its head office;

policy moneys paid or payable in respect of its offshore non‑participating reinsurance policies (less any amount recovered or recoverable in respect of those policies under reinsurance);

moneys paid or payable on the surrender of its offshore non‑participating reinsurance policies;

the net increase between the beginning and ending values of the policy liabilities of the part of any life insurance fund relating to its offshore non‑participating reinsurance policies for the period for which the gains or profits are ascertained, both values being determined in accordance with the Insurance Act;“offshore life reinsurance business” means the business of reinsuring the liability of a life policy, or an accident and health policy, of any life insurance fund, not being a Singapore policy within the meaning of the Insurance Act;”;

by inserting, immediately after the definition of “offshore risk” in subsection (12), the following definitions:“ “onshore life business” means the business of insuring or reinsuring the liability of a life policy, or accident and health policy, of any life insurance fund, being a Singapore policy within the meaning of the Insurance Act;“onshore life insurance surplus”, in relation to an insurer under subsection (7A)(a)(i), means the amount ascertained by taking the following steps:

add the following:

the gross premiums (including consideration paid or payable for the purchase of annuities) from its Singapore non‑participating reinsurance policies of any life insurance fund (less any premiums returned to the insured and premiums paid or payable on reinsurance);

the net decrease between the beginning and ending values of the policy liabilities of the part of any life insurance fund relating to its Singapore non‑participating reinsurance policies for the period for which the gains or profits are ascertained, both values being determined in accordance with the Insurance Act;

the investment income and gains or profits derived from the sale of investments and other income, whether derived from Singapore or elsewhere, of the part of any life insurance fund relating to its Singapore non‑participating reinsurance policies; (b)subtract from the total under paragraph (a), all of the following:

distribution expenses and management expenses incurred in the production of the income in paragraph (a) and, in respect of a branch in Singapore, a fair proportion of the expenses of its head office;

policy moneys paid or payable in respect of its Singapore non‑participating reinsurance policies (less any amount recovered or recoverable in respect of those policies under reinsurance);

moneys paid or payable on the surrender of its Singapore non‑participating reinsurance policies;

the net increase between the beginning and ending values of the policy liabilities of the part of any life insurance fund relating to its Singapore non‑participating reinsurance policies for the period for which the gains or profits are ascertained, both values being determined in accordance with the Insurance Act;“onshore life insurance surplus”, in relation to the non‑participating fund and the investment‑linked fund of an insurer, means the amount ascertained by taking the following steps:

add the following:

the gross premiums (including consideration paid or payable for the purchase of annuities) from Singapore non‑participating and Singapore investment‑linked policies of any life insurance fund (less any premiums returned to the insured and premiums paid or payable on reinsurance);

the net decrease between the beginning and ending values of the policy liabilities of any life insurance fund relating to Singapore non‑participating and Singapore investment‑linked policies for the period for which the gains or profits are ascertained, both values being determined in accordance with the Insurance Act;

the investment income and gains or profits derived from the sale of investments and other income, whether derived from Singapore or elsewhere, of any life insurance fund relating to Singapore non‑participating and Singapore investment‑linked policies;

subtract from the total under paragraph (a), all of the following:

distribution expenses and management expenses incurred in the production of the income in paragraph (a) and, in respect of a branch in Singapore, a fair proportion of the expenses of its head office;

policy moneys paid or payable in respect of Singapore non‑participating and Singapore investment‑linked policies (less any amount recovered or recoverable in respect of those policies under reinsurance);

moneys paid or payable on the surrender of Singapore non‑participating and Singapore investment‑linked policies;

the net increase between the beginning and ending values of the policy liabilities of any life insurance fund relating to Singapore non‑participating and Singapore investment‑linked policies for the period for which the gains or profits are ascertained, both values being determined in accordance with the Insurance Act;“onshore life reinsurance business” means the business of reinsuring the liability of —

a life policy of any life insurance fund; or

an accident and health policy of any life insurance fund,being a Singapore policy within the meaning of the Insurance Act;“onshore risk” means a risk or liability that is insured by a policy of a general insurance fund established and maintained under the Insurance Act, being a Singapore policy within the meaning of that Act;”; and

by inserting, immediately after subsection (12), the following subsection:“(13) For the purposes of paragraphs (a)(ii) and (b)(iv) of both definitions of “onshore life insurance surplus”, and paragraphs (a)(ii) and (b)(iv) of both definitions of “offshore life insurance surplus” in subsection (12), if, during the period for which the gains or profits are ascertained, any life insurance business is transferred by or to the insurer, then —

in a case where the business is transferred by the insurer, the liabilities of the insurer immediately before the date of the transfer, in respect of policies that form part of that business, are to be added to the ending value mentioned in each of those provisions; and

in a case where the business is transferred to the insurer, the liabilities of the transferor immediately before the date of the transfer, in respect of policies that form part of that business, are to be added to the beginning value mentioned in each of those provisions.”.