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Income derived on or after 1 July 2021 of approved captive insurer exempt from tax

Income Tax (Exemption and Concessionary Tax Rate for Income from Life Insurance Business) Regulations

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—(1) Subject to the condition in paragraph (4), the income mentioned in paragraph (2) derived on or after 1 July 2021 by an approved captive insurer in a basis period for any year of assessment is exempt from tax, if the insurer’s approval is granted before 1 June 2017.(2) For the purposes of paragraph (1), the income is —(a)the onshore life insurance surplus, and offshore life insurance surplus (as the case may be) derived by the insurer from accepting life reinsurance policies, excluding —(i)income derived by the insurer from accepting life reinsurance policies covering third parties which are not underwritten in the course of, nor incidental to, its captive life business;(ii)gains or profits from the sale of investments that are acquired using any life insurance fund relating to life reinsurance policies; and(iii)investment income or any other income derived from such life insurance fund, whether or not the income is derived in Singapore or elsewhere;(b)the part of A that is ascertained by the formula (c)the part of B that is ascertained by the formula and(d)the part of C that is ascertained by the formula (3) In paragraph (2) —“A”, “B”, “C”, “Pil”, “Pinp”, “Pol” and “Ponp” have the meanings given by regulation 4A(3), with each reference to approved insurer substituted with the reference to approved captive insurer;“Pilc” is the total amount of gross premiums received or receivable in the basis period in respect of all non-participating policies underwritten by the approved captive insurer in the course of carrying on its captive life business in Singapore (other than offshore captive life business), excluding the amount of gross premiums received or receivable by the insurer in that basis period in respect of —(a)all policies covering third parties which are not underwritten by the insurer in the course of, nor incidental to, that business; and(b)all policies insuring direct life risk which are underwritten by the insurer in the course of that business;“Polc” is the total amount of gross premiums received or receivable in the basis period in respect of all non-participating policies underwritten by the approved captive insurer in the course of carrying on its offshore captive life business in Singapore, excluding the amount of gross premiums received or receivable by the insurer in that basis period in respect of —(a)all policies covering third parties which are not underwritten by the insurer in the course of, nor incidental to, that business; and(b)all policies insuring direct life risk which are underwritten by the insurer in the course of that business.(4) For the purposes of paragraph (1), the condition is that at all times in the basis period in which the income is derived, all the functions in the following are undertaken by the approved captive insurer, by a company incorporated in Singapore, or by personnel located in Singapore who are employed by a company incorporated outside Singapore:(a)either or both of the following:(i)ensuring compliance with any requirement or any direction, notice or other document issued under the Insurance Act 1966;(ii)ensuring compliance with any requirement or any direction, notice or other document issued under the Monetary Authority of Singapore Act 1970 or the Financial Services and Markets Act 2022;(b)ensuring compliance with any requirement relating to financial accounting, auditing and reporting under the Companies Act 1967;(c)the day-to-day management of the approved captive insurer’s business.(5) For the purposes of paragraph (2), where the Comptroller is satisfied that any part of the non-participating fund mentioned in the definition of “A” or “B” in regulation 4A(3) (as applied by paragraph (3)) is not required to support the offshore captive life business or the captive life business (other than the offshore captive life business) of the approved captive insurer (as the case may be), the Comptroller may adopt such reduced amount of “A” in paragraph (2)(b) or “B” in paragraph (2)(c) as appears to the Comptroller to be reasonable in the circumstances.(6) For the purposes of paragraph (2), where the Comptroller is satisfied that any part of the shareholders’ fund mentioned in the definition of “C” in regulation 4A(3) (as applied by paragraph (3)) is not required to support the captive life business of the approved captive insurer, the Comptroller may adopt such reduced amount of “C” in paragraph (2)(d) as appears to the Comptroller to be reasonable in the circumstances.

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