Singapore legislation
Regulation 16
Regulation 16
Remuneration Committee
Subregulation 1
Subject to paragraphs (2) and (6) and regulations 14(3) and 20, a Tier 1 insurer shall have a Remuneration Committee comprising —
at least 3 members of the Board of the Tier 1 insurer; and
at least a majority of directors (including the chairman of the Remuneration Committee) who are independent directors.
Subregulation 2
Where a single substantial shareholder holds 50% or more of the share capital or the voting power in a Tier 1 insurer, paragraph (1)(b) shall not apply to the Tier 1 insurer only if the Tier 1 insurer has a Remuneration Committee comprising —
at least a majority of directors who are independent from management and business relationships with the Tier 1 insurer; and
at least one-third of directors (including the chairman of the Remuneration Committee) who are independent directors.
Subregulation 3
In addition to such other responsibilities as may be determined by the Board of the Tier 1 insurer, the Remuneration Committee of the Tier 1 insurer shall be responsible for —
recommending a framework for determining the remuneration of the directors of the Tier 1 insurer;
recommending a framework for determining the remuneration of the executive officers of the Tier 1 insurer which shall include the following elements and factors in the design and operation of the framework:
the remuneration package of each executive officer of the Tier 1 insurer —
shall be aligned to the specific job function undertaken by the executive officer and, where the executive officer undertakes any of the Tier 1 insurer’s control job functions, the remuneration package of that executive officer shall be determined independently of the business functions of the Tier 1 insurer;
shall take into account input from the Tier 1 insurer’s control job functions as may be relevant to the specific job function undertaken by the executive officer;
shall be aligned with the risks that the Tier 1 insurer undertakes in its business that is relevant to the specific job function undertaken by the executive officer;
shall be sensitive to the time horizon of risks that the Tier 1 insurer is exposed to, which includes ensuring that variable compensation payments shall not be finalised over short periods of time when risks are realised over long periods of time;
shall, in relation to the quantum of bonus payable to the executive officer, be linked to his personal performance, the performance of his specific job function as a whole and the overall performance of the Tier 1 insurer; and
shall, in relation to the rationale for the mix of cash, equity and other forms of incentives, be justified; and
the size of the bonus pool of the Tier 1 insurer shall be linked to the overall performance of the Tier 1 insurer;
recommending the remuneration of each director and executive officer of the Tier 1 insurer based on the frameworks referred to in sub-paragraphs (a) and (b), respectively; and
reviewing, at least once in each year, the remuneration practices of the Tier 1 insurer to ensure that they are aligned with the recommendations made in accordance with sub-paragraphs (a), (b) and (c).
Subregulation 4
In paragraph (3) —
Definition
“business functions” means the job functions in the Tier 1 insurer that conduct risk-taking activities in relation to the business of the Tier 1 insurer;
Definition
“control job functions” means the following job functions:
risk control and management;
finance;
compliance;
internal audit;
human resource;
actuarial; and
risk control related back office operations.
Subregulation 5
The Remuneration Committee shall maintain records of all its meetings.
Subregulation 6
If a member of the Remuneration Committee resigns, ceases to be a director or for any other reason ceases to be a member of the Remuneration Committee —
the Tier 1 insurer shall notify the Authority of the event within 14 days after the occurrence of the event; and
if this results in a breach of any requirement under paragraph (1), the Board shall, within 3 months after that event, appoint such number of new members as may be required to rectify the composition of the Remuneration Committee in accordance with that requirement.
Subregulation 7
Any Tier 1 insurer which contravenes paragraph (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000 and, in the case of a continuing offence, to a further fine not exceeding $2,500 for every day or part thereof during which the offence continues after conviction.
Subregulation 8
Any Tier 1 insurer which contravenes paragraph (6)(a) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $25,000.