Deposit Insurance and Policy Owners’ Protection Schemes Bill

In this Act, unless the context otherwise requires —

“accident and health policy” has the same meaning as in the First Schedule to the Insurance Act (Cap. 142);

“account with the electronic service”, in relation to any person, means a computer account within the electronic service which is assigned by the Authority to that person for the storage and retrieval of electronic records relating to that person;

“Agency” means the company designated by the Minister under section 56 to be the deposit insurance and policy owners’ protection fund agency;

“appointed day” means the date of commencement of this Act;

“authentication code”, in relation to any person, means an identification or identifying code, a password or any other authentication method or procedure which is assigned to that person for the purposes of identifying and authenticating the access to and use of the electronic service by that person;

“Authority” means the Monetary Authority of Singapore established under section 3 of the Monetary Authority of Singapore Act (Cap. 186);

“bank” has the same meaning as in section 2(1) of the Banking Act (Cap. 19);

“beneficiary”, in relation to an insured policy covered under the PPF General Fund which provides third party benefits, means any person entitled to claim the third party benefits under the terms of that insured policy;

“book” includes any record, register, document or other record of information, and any account or accounting record, however compiled, recorded or stored, whether in written or printed form or on microfilm or in electronic form or otherwise;

“captive insurer” has the same meaning as in section 1A of the Insurance Act (Cap. 142);

“Chief Executive” means the Chief Executive of the Agency appointed under section 62 and includes any person acting in that capacity;

“claim event” means the contingency upon which policy moneys are payable under an insured policy;

“client account”, in relation to an insured depositor, means an account maintained by the insured depositor with a DI Scheme member for the purpose of holding moneys by the insured depositor for a client of the insured depositor, whether or not other moneys may be held in that account;

“commuted value”, in relation to an insured policy which provides for the payment of an annuity, means the present value of the expected future payments to be made —

“company” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

“compulsory insurance policy” means any policy of insurance which complies with the requirements of —

“corporation” has the same meaning as in section 4(1) of the Companies Act;

“coupon deposit”, in relation to any insured policy, means any sum of money, being part of the policy moneys which the insurer is obliged to pay to the insured policy owner at agreed intervals under the terms of the insured policy, including any amount due at maturity, which the insured policy owner instructs the insurer not to pay out to him but for the sum of money to be deposited with the insurer to earn interest at an agreed rate;

“CPFIS” means the Central Provident Fund Investment Scheme introduced by the Central Provident Fund Board under the Central Provident Fund (Investment Schemes) Regulations (Cap. 36, Rg 9);

“CPFMS” means the Central Provident Fund Minimum Sum Scheme introduced by the Central Provident Fund Board under the Central Provident Fund (Minimum Sum Scheme) Regulations (Cap. 36, Rg 16);

“deposit” means a sum of money paid on terms —

“deposit-taking business” has the same meaning as in section 4B of the Banking Act (Cap. 19);

“depositor” means any person who is entitled to repayment of a deposit, whether or not the deposit is made by him;

“DI exempt member” means a full bank or finance company which has been exempted by the Authority under section 6 from the requirement to be a DI Scheme member;

“DI Fund” means the Deposit Insurance Fund reconstituted under section 9;

“direct insurer” has the same meaning as in section 1A of the Insurance Act (Cap. 142);

“DI Scheme” means the Deposit Insurance Scheme reconstituted under section 4;

“DI Scheme member” means a member of the DI Scheme;

“electronic record” has the same meaning as in section 2 of the Electronic Transactions Act 2010 (Act 16 of 2010);

“electronic service” means the electronic service provided by the Authority under section 86;

“excluded person” means —

“failed DI Scheme member” means a DI Scheme member in respect of which the Authority has determined that compensation shall be paid out of the DI Fund to the insured depositors of that DI Scheme member, and any reference to “failure” in relation to a DI Scheme member shall be construed accordingly;

“failed PPF Scheme member” means a PPF Scheme member in respect of which the Authority has determined that compensation shall be paid out of the PPF Life Fund or PPF General Fund, as the case may be, or that the PPF Life Fund or PPF General Fund is to be utilised for the funding of a transfer or run-off of the insurance business of that PPF Scheme member, and any reference to “failure” in relation to a PPF Scheme member shall be construed accordingly;

“finance company” has the same meaning as in section 2 of the Finance Companies Act (Cap. 108);

“full bank” means any bank holding a licence granted by the Authority under the Banking Act which permits the bank to carry on the full range of banking business;

“general business” and “life business” have the same meanings as in section 2 of the Insurance Act (Cap. 142), read with section 3(1B) of that Act;

“group policy” means any policy of insurance in respect of which the policy owner is not an individual;

“guaranteed policy liabilities”, in relation to insured policies, means the policy liabilities, relating to benefits guaranteed under the insured policies only, calculated in accordance with regulations prescribed pursuant to section 18 of the Insurance Act (Cap. 142) for the valuation of assets and liabilities in an insurance fund;

“health policy” means any accident and health policy which is not a personal accident policy;

“individual policy” means a policy of insurance in respect of which the policy owner is an individual;

“insured deposit” has the meaning given to it in the First Schedule;

“insured deposit base” has the meaning given to it in section 3;

“insured depositor” means any person who is not an excluded person and is entitled to the repayment of any insured deposit, whether or not the insured deposit is made by him, and includes —

“insured policy” means —

“insured policy owner” means the policy owner of an insured policy;

“life policy” has the same meaning as in the First Schedule to the Insurance Act;

“liquidator” has the same meaning as in section 4(1) of the Companies Act (Cap. 50);

“marine mutual insurance business” means the business of providing the insurance of liabilities under insurance policies on the basis of mutual insurance —

“Maximum DI Coverage” has the meaning given to it in the First Schedule;

“non-voluntary group insurance policy” means a group policy to insure the lives of certain individuals which is not taken out at the request or discretion of any of the life assureds;

“officer” has the same meaning as in section 2(1) of the Banking Act (Cap. 19);

“parent bank” has the same meaning as in section 2(1) of the Banking Act;

“parent supervisory authority” has the same meaning as in section 2(1) of the Banking Act;

“personal accident policy” means an accident and health policy in respect of which accident and health benefits are paid out only —

“policy” has the same meaning as in the First Schedule to the Insurance Act (Cap. 142);

“policy owner” has the same meaning as in the First Schedule to the Insurance Act (Cap. 142);

“PPF exempt member” means a relevant insurer which has been exempted by the Authority under section 32 from the requirement to be a PPF Scheme member;

“PPF General Fund” means the Policy Owners’ Protection General Fund established under section 34(1)(b);

“PPF Life Fund” means the Policy Owners’ Protection Life Fund established under section 34(1)(a);

“PPF Scheme” means the Policy Owners’ Protection Scheme established under section 30;

“PPF Scheme member” means a member of the PPF Scheme;

“premium year”, in relation to the determination and payment of premium contributions and levies, means such period as may be prescribed by the Authority as a premium year —

“prescribed product” means any product which is prescribed by the Authority as an insured deposit under the First Schedule;

“protected liabilities” has the meaning given to it in the Third Schedule;

“protection ratio” has the meaning given to it in the Fourth Schedule;

“quantification date” means —

“relevant insured deposits” has the meaning given to it in section 3;

“relevant insurer” means —

“repealed Act” means the Deposit Insurance Act (Cap. 77A, 2006 Ed.) repealed by this Act;

“Rules” means any rules issued by the Agency under section 63;

“Singapore policy” has the same meaning as in the First Schedule to the Insurance Act;

“specialist insurer” means —

“specified personal line insurance policy” means —

“Supplementary Retirement Scheme” has the same meaning as in section 2(1) of the Income Tax Act (Cap. 134);

“unclaimed moneys”, in relation to an insured policy issued by a failed PPF Scheme member, means any policy moneys which, as a result of a contingency happening, have been ascertained by the failed PPF Scheme member to be due and payable under that insured policy before the quantification date but which have not been paid to or have been paid but not yet received by the person entitled to payment of the policy moneys.

For the purposes of the definition of “deposit”, money is paid on terms which are referable to the provision of property or services if, and only if, it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is or are not in fact sold, hired or otherwise provided.

In this Act, unless the context otherwise requires, “insured deposit base”, in relation to a DI Scheme member, means the aggregate of the amount of every relevant insured deposit of all the insured depositors of the DI Scheme member.

In subsection (1), “relevant insured deposits”, in relation to an insured depositor of a DI Scheme member, means —

For the purposes of subsection (2) —

Where, on or after the appointed day —

Where the Authority determines that compensation shall be paid out of the DI Fund under subsection (1), the Authority shall immediately give notice in writing to the Agency of its determination.

The notice in writing referred to in subsection (2) shall be in such form and contain such information as may be agreed between the Authority and the Agency.

The Agency shall, as soon as practicable upon receiving the notice referred to in subsection (2), publish a notice in the Gazette stating that a payment of compensation shall be made out of the DI Fund.

Subject to subsection (5) and section 23, where an insured depositor has one or more insured deposits placed with a failed DI Scheme member (other than any moneys, denominated in Singapore dollars, placed with the failed DI Scheme member under the CPFIS and CPFMS), which —

Where any insured depositor has one or more insured deposits placed with a failed DI Scheme member (other than moneys denominated in Singapore dollars, placed with the failed DI Scheme member under the CPFIS and CPFMS) which the insured depositor holds in an account as trustee under a trust or holds in a client account, the insured depositor shall be entitled, in respect of every such account, to compensation from the DI Fund, not exceeding the amount of such insured deposits in that account or the Maximum DI Coverage, whichever is the lower.

For the purposes of subsection (2), where there are 2 or more insured depositors holding any insured deposit in an account under a trust or in a client account jointly, the compensation referred to in subsection (2) shall be divided equally among those insured depositors and paid accordingly.

Where any insured deposit of any insured depositor placed with a failed DI Scheme member consists of moneys, denominated in Singapore dollars, placed with the failed DI Scheme member under the CPFIS or CPFMS, such moneys shall not be aggregated with his other insured deposits placed with that failed DI Scheme member for the purposes of determining the amount of compensation that the insured depositor is entitled to, and the insured depositor shall be entitled, in respect of moneys denominated in Singapore dollars placed with the failed DI Scheme member under the CPFIS and CPFMS, to compensation from the DI Fund, not exceeding the amount of such moneys placed with the failed DI Scheme member or the Maximum DI Coverage, whichever is the lower.

Where an insured depositor has one or more prescribed products placed with a failed DI Scheme member, which the Minister has, by order published in the Gazette, determined to be subject to separate coverage under the DI Scheme (referred to in this section as the first-mentioned prescribed products), whether on their own or in aggregation with other prescribed products (referred to in this section as the other prescribed products) —

For the purposes of determining the amount of compensation which an insured depositor is entitled under this section, the liabilities, if any, that are owing from the insured depositor to the failed DI Scheme member shall be disregarded.

Notwithstanding the provisions in this section —

Where an insured depositor holds any insured deposit in his own right, the insured depositor is entitled, in respect of the insured deposit as at the quantification date, to compensation from the DI Fund.

Where there are 2 or more insured depositors holding any insured deposit, each of those insured depositors is entitled, in respect of his share in the insured deposit as at the quantification date, to compensation from the DI Fund.

For the purposes of determining the share of any insured depositor in an insured deposit under subsection (2), each insured depositor holding such insured deposit shall be deemed to have an equal share in the insured deposit unless there is an express provision to the contrary in the books of the failed DI Scheme member.

For the avoidance of doubt, subsection (3) does not affect any rights as between the persons holding such insured deposit themselves.

The Agency shall compute the amount of compensation due to any insured depositor in respect of his insured deposits placed with a failed DI Scheme member in accordance with this Act.

In determining the eligibility and entitlement of any insured depositor to compensation and computing the amount of compensation due to any insured depositor, the Agency is entitled to rely on the books of the failed DI Scheme member and any other books which, in the opinion of the Agency, are relevant for such determination and computation.

Subject to subsection (4), the Agency shall pay the compensation in such form and manner as may be specified in the Rules.

The Authority may make regulations for the purposes of payment of compensation by the Agency.

Without prejudice to the generality of subsection (4), such regulations may —

Where —

The Minister may extend the additional cover period for the insured deposits under subsection (1) —

Upon payment out of the DI Fund of any compensation under this Act to, or for the benefit of, any insured depositor in respect of his insured deposit or any person referred to in section 22(7) in respect of that insured deposit, the Agency shall be subrogated to the extent of such payment to all the rights and remedies of —

Where the Agency maintains an action in respect of the rights and remedies in the name of the person referred to in subsection (1)(a), (b), (c), (d) or (e), as the case may be, the following provisions shall apply:

For the purposes of subsection (1), where the Agency is unable to effect payment to an insured depositor (due to incorrect or outdated addresses, in respect of accounts which are dormant or any other reasons beyond the reasonable control of the Agency), the Agency shall be deemed to have made payment out of the DI Fund of compensation under this Act to, or for the benefit of, an insured depositor in respect of his insured deposit, if the Agency makes payment of the compensation to the Public Trustee appointed under the Public Trustee Act (Cap. 260) to be held on trust for the insured depositor.

The persons referred to in paragraphs (a), (b), (c), (d) and (e) of subsection (1), or any person who is subrogated, whether or not before the Agency’s subrogation, to the rights and remedies of those persons, shall not be entitled to receive any amount from, or out of, the assets of the failed DI Scheme member until the Agency has been reimbursed in full the amount of compensation paid to those persons and any expenses under subsection (5).

Notwithstanding any provision in the Companies Act (Cap. 50), the Agency shall be entitled —

The Authority may by regulations, provide for the manner, process or method by which the Agency may exercise its rights to be subrogated to the rights and remedies as set out in subsection (1).

For the purposes of making payment of compensation by the Agency to the Public Trustee under subsection (3) and payment of compensation by the Public Trustee to insured depositors and any person referred to in section 22(7), the Authority may, with the concurrence of the Public Trustee and in consultation with the Agency, make regulations for or in respect of all or any of the following matters:

The provisions in the Fifth Schedule shall apply in relation to the holding and payment of compensation under this Act by the Public Trustee to insured depositors and any person referred to in section 22(7).

If the Authority wishes to amend or vary any regulations made under subsection (7), the Authority shall first conduct a joint review with the Public Trustee and such regulations shall not be amended or varied without the concurrence of the Public Trustee and consulting the Agency.

If —

Without prejudice to any other remedy, any amount paid in error or excess to any person shall be recoverable as a debt due to the Agency by that person.

Notwithstanding any provision in the Limitation Act (Cap. 163), an action to recover any amount paid in error or excess to any person recoverable by virtue of this section shall not be brought after the expiration of the period during which the action may be brought against the person under the Limitation Act or the date of completion of the winding up of the failed DI Scheme member, whichever is the later.

Upon the recovery of any amount paid in error or excess from any person under this section (referred in this section as the recovered amount), the Agency shall do the following:

Section 322(3), (6), (7), (8) and (9) of the Companies Act (Cap. 50) shall apply, with the necessary modifications, to the money paid to the Official Receiver under subsection (4)(c) and (d).

Subject to subsection (3), notwithstanding any written law or rule of law, where —

Such moneys shall be recoverable as a debt due to the failed DI Scheme member by the insured depositor or any person who received compensation on behalf of the insured depositor.

This section shall not apply to any moneys held by the Public Trustee pursuant to any payment of compensation by the Agency under section 27(3).

Subject to the provisions of this Act, the objects of the Agency shall be —

Without prejudice to the generality of subsection (1), the functions of the Agency shall include the following:

The Agency shall have the power to do anything for the purpose of fulfilling its objects and discharging its functions under this Act or any other written law, or which is incidental or conducive to the fulfilment of those objects and discharge of those functions.

Notwithstanding sections 9(4) and 34(5) and (6), the Agency may transfer to its account for the purpose of paying expenses of the Agency, moneys from the DI Fund, PPF Life Fund and PPF General Fund up to the amount approved under section 77 by the Minister as annual estimates and supplementary estimates of income and expenditure of the DI Fund, PPF Life Fund and PPF General Fund.

Notwithstanding any provision in the Companies Act (Cap. 50), the Agency shall not amend the memorandum and articles of association of the Agency without the prior approval of the Minister.

Any amendment made to the memorandum and articles of association of the Agency without the prior approval of the Minister shall be void.

This section shall have effect notwithstanding any provision in the Companies Act and the memorandum and articles of association of the Agency.

The board of directors of the Agency shall consist of —

A director shall hold office for a term not exceeding 3 years and shall be eligible for reappointment.

No person shall be appointed as or remain a director on the board of directors if he is a substantial shareholder, a director or an employee of —

In this section —

“related corporation” has the same meaning as in section 4(1) of the Companies Act;

“substantial shareholder” has the same meaning as in section 81 of the Companies Act.

The board of directors shall appoint a Chief Executive on such terms and conditions as the board may determine.

The Chief Executive shall —

Where the Chief Executive is temporarily absent from Singapore or temporarily incapacitated by reason of illness, or is for any other reason temporarily unable to perform his duties, a person may be appointed by the board of directors to act in the place of the Chief Executive during any such period of absence from duty.

The Agency may, from time to time, appoint and employ on such terms and conditions as it may determine, such other officers, employees, consultants and agents as may be necessary for the effective performance of its functions.

The Agency may issue, and in its discretion publish for information in the Gazette or in any other manner as it considers appropriate, Rules for any matter relating to any of its functions under this Act.

Without prejudice to the generality of subsection (1), such Rules may provide for —

The Agency may, at any time, amend or revoke the whole or part of any Rule issued under this section.

Without limiting the operation of any other provision of this Act, the Rules shall bind the Agency, the DI Scheme members and the PPF Scheme members to the same extent as if the Rules had been contained in properly executed agreements on the part of the Agency and each DI Scheme member, or the Agency and each PPF Scheme member, as the case may be, to observe and comply with all the Rules.

For the avoidance of doubt, no person, other than the Agency, a DI Scheme member or a PPF Scheme member, shall have any right to enforce the observance of or compliance with any of the Rules where such Rule is relevant.

For the avoidance of doubt, any Rules issued under this section shall be deemed not to be subsidiary legislation.

No Rule issued by the Agency shall be inconsistent with any regulations made by the Authority under this Act and any such Rule which is so inconsistent shall, to the extent of inconsistency, be void.

The Authority may, for the purposes of ensuring disclosure of relevant information by the DI Scheme members and PPF Scheme members to the Agency, depositors, policy owners, customers or potential customers of the DI Scheme members and PPF Scheme members, make regulations for or in respect of all or any of the following matters:

The Authority may, for the purposes of ensuring the operational preparedness of the DI Scheme members and PPF Scheme members in the event of an occurrence of any event precipitating the use of the DI Fund, PPF Life Fund or PPF General Fund, as the case may be, make regulations for or in respect of all or any of the following matters:

The regulations made under subsection (1) may provide that any contravention of any provision of the regulations shall be an offence punishable with a fine not exceeding $125,000 or with imprisonment for a term not exceeding 3 years or with both and, in the case of a continuing offence, with a further fine of $12,500 for every day or part thereof during which the offence continues after conviction.

The regulations made under subsection (2) may provide that any contravention of any provision of the regulations shall be an offence punishable with a fine not exceeding $125,000 and, in the case of a continuing offence, with a further fine of $12,500 for every day or part thereof during which the offence continues after conviction.

Where any person who is bound to observe or comply with the Rules fails to do so, the High Court may, on the application of the Agency, a DI Scheme member or a PPF Scheme member, and after giving the first-mentioned person an opportunity to be heard, make an order directing the first-mentioned person to observe or comply with those Rules.

This section is in addition to, and not in derogation of, any other remedy available to the Agency, the DI Scheme member or the PPF Scheme member.

Every full bank or finance company which is not exempted under section 6 shall be a DI Scheme member so long as it holds a valid licence under the Banking Act (Cap. 19) or the Finance Companies Act (Cap. 108), as the case may be.

Every full bank or finance company, which holds a valid licence under the Banking Act or the Finance Companies Act, as the case may be, immediately before the appointed day, shall be deemed to be a DI Scheme member from that day.

Every full bank or finance company, which is granted a licence under the Banking Act or the Finance Companies Act, as the case may be, on or after the appointed day, shall be a DI Scheme member from the date on which its licence is granted.

Any full bank or finance company may apply in writing to the Authority to be exempted from the requirement under section 5(1) to be a DI Scheme member.

Upon an application by a full bank or finance company under subsection (1), the Authority may, subject to subsection (4), exempt the full bank or finance company from the requirement under section 5(1), and notice of every such exemption shall be published in the Gazette.

The Authority may require the applicant to furnish the Authority with such information or documents as the Authority considers necessary in relation to the application.

Without prejudice to the generality of subsection (2), the Authority shall, in determining whether to grant an exemption under subsection (2), have regard to —

The Authority may, when granting any exemption under subsection (2), impose on the DI exempt member by notice in writing such conditions or restrictions relating to the exemption as the Authority may think fit.

The Authority may at any time —

Every DI exempt member shall comply with all the conditions and restrictions imposed on it under subsections (5) and (6).

Any DI exempt member which contravenes subsection (7) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine of $10,000 for every day or part thereof during which the offence continues after conviction.

The Authority may withdraw the exemption granted to a DI exempt member under section 6(2) if —

Before withdrawing any exemption under subsection (1), the Authority shall —

If the DI exempt member to whom a notice is given under subsection (2) —

Where a withdrawal of exemption becomes effective, the Authority shall publish a notice of the withdrawal in the Gazette.

The Authority may by regulations require any DI Scheme member, or any class of DI Scheme members, to maintain, in relation to its or their insured deposit base, such minimum amount of assets in Singapore as may be specified in such regulations for meeting its or their liabilities in respect of insured deposits placed with the DI Scheme member.

The Authority may make regulations which are necessary or expedient for carrying out the purposes of this section, including regulations for or with respect to —

If the Authority is satisfied that a DI Scheme member has failed to comply with any asset maintenance requirement under subsection (1), the Authority may impose a financial penalty.

Any DI Scheme member which fails to comply with any asset maintenance requirement of the Authority under subsection (1) shall be liable to pay, upon being called to do so by the Authority, for every day or part thereof of such failure, a financial penalty in accordance with such formula as the Minister may, by order published in the Gazette, prescribe.

Before imposing a financial penalty on any DI Scheme member, the Authority shall —

If the DI Scheme member to whom a notice is given under subsection (5) —

Where a DI Scheme member is given a notice under subsection (6), the DI Scheme member shall pay the financial penalty to the Authority by the date of payment specified in the notice.

Any financial penalty payable under this Act shall be recoverable as a debt due to the Authority by the DI Scheme member.

Notwithstanding any provision in the Limitation Act (Cap. 163), an action to recover any financial penalty recoverable by virtue of this section shall not be brought after the expiration of 3 years from the date on which the cause of action accrued.

Any financial penalty paid to or recovered by the Authority shall be paid into the DI Fund.

Where the Authority has commenced any proceedings in a court to recover a financial penalty from a DI Scheme member, the Authority shall be entitled to claim costs on a full indemnity basis from that DI Scheme member.

Any DI Scheme member which is aggrieved by a decision of the Authority to impose a financial penalty under subsection (6) may, within 30 days after the decision of the Authority, appeal in writing to the Minister whose decision shall be final and shall be given effect to by the Authority.

For the avoidance of doubt, the period of limitation referred to in subsection (9) shall not be postponed solely on account of an appeal under subsection (12).