On 19/05/2013,
you requested for the version in force on 19/05/2013
incorporating all amendments published on or before 19/05/2013.
The closest version currently available is that of 29/04/2011.
PART IX
COMPENSATION AND USE OF PPF LIFE FUND AND PPF GENERAL FUND
46.
—(1) Where, on or after the effective date —
(a)
an order is made by a court in Singapore or elsewhere to wind up a PPF Scheme member;
(b)
the Authority is of the opinion that a PPF Scheme member is insolvent, unable or likely to become unable to meet its obligations, or about to suspend payments; or
(c)
the Authority is exercising or is likely to exercise, or has exercised its powers under Part IIIAA of the Insurance Act (Cap. 142),
the Authority may determine —
(i)
that compensation shall be paid out of the PPF Life Fund or the PPF General Fund to the insured policy owners, and also to the beneficiaries in the case of insured policies covered under the PPF General Fund which provide third party benefits, in accordance with this Act; or
(ii)
that the PPF Life Fund or the PPF General Fund be utilised for either or both of the following purposes:
(A)
to fund, whether in whole or in part, the transfer of the whole or part of the business of the failed PPF Scheme member to another insurer;
(B)
to fund the run-off of the insurance business of the failed PPF Scheme member without taking in any new insurance business or renewing any existing policies (other than a policy which has a provision providing for guaranteed renewability).
(2) Where the Authority makes any determination referred to in subsection (1), the Authority shall immediately give notice in writing to the Agency of its determination.
(3) 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.
(4) The Agency shall, as soon as practicable upon receiving the notice referred to in subsection (2), publish a notification in the Gazette stating that a payment of compensation shall be made out of the PPF Life Fund or the PPF General Fund, or that the PPF Life Fund or the PPF General Fund shall be utilised to fund the transfer or run-off the insurance business of the failed PPF Scheme member, as the case may be.
(5) For the purposes of this Act, the Minister shall by notification in the Gazette appoint a date to be the effective date.
47.
—(1) Subject to subsection (2) and section 49, where an insured policy owner has one or more insured policies covered under the PPF Life Fund, issued by a failed PPF Scheme member, which —
(a)
is issued to the insured policy owner; or
(b)
is issued to the insured policy owner jointly with one or more other persons as joint policy owners,
the insured policy owner shall be entitled to compensation from the PPF Life Fund of one or more of the following amounts:
(i)
in the case of a Category 1 insured policy referred to in the Second Schedule, an amount equivalent to the product of the protection ratio referred to in paragraph 2(a) of the Fourth Schedule and the amount of policy moneys payable in respect of that insured policy;
(ii)
in the case of a Category 2 insured policy referred to in the Second Schedule, an amount equivalent to —
(A)
the product of the protection ratio for sum assured referred to in paragraph 2(b) of the Fourth Schedule and the sum assured guaranteed under that insured policy in the event that a claim event occurs before the quantification date; or
(B)
the product of the protection ratio for surrender value referred to in paragraph 2(c) of the Fourth Schedule and the surrender value guaranteed under that insured policy in the event that the insured policy owner has given notice in writing to the failed PPF Scheme member to surrender that insured policy before the quantification date;
(iii)
in the case of a Category 3 insured policy referred to in the Second Schedule, an amount equivalent to the product of the protection ratio referred to in paragraph 2(d) of the Fourth Schedule and the amount of policy moneys guaranteed to be payable under the annuity by the failed PPF Scheme member;
(iv)
in the case of a Category 4 insured policy referred to in the Second Schedule, an amount equivalent to —
(A)
the product of the protection ratio for sum assured referred to in paragraph 2(e)(i) of the Fourth Schedule and the sum assured guaranteed under that insured policy in the event that a claim event occurs before the quantification date;
(B)
the product of the protection ratio for surrender value referred to in paragraph 2(e)(ii) of the Fourth Schedule and the surrender value guaranteed under that insured policy in the event of a surrender before the quantification date; or
(C)
the product of the protection ratio for the commuted value referred to in paragraph 2(e)(iii) of the Fourth Schedule and the amount of policy moneys which are guaranteed to be payable in the case of an annuity.
(2) Where a claim event for an insured policy has occurred or where an insured policy has been terminated, on or before the quantification date, the amount of compensation referred to in subsection (1) shall be an amount after deducting any outstanding loan taken out against that insured policy.
48.
—(1) Subject to subsection (2) and section 49, where an insured policy owner has one or more insured policies covered under the PPF General Fund issued by a failed PPF Scheme member, which —
(a)
is issued to the insured policy owner; or
(b)
is issued to the insured policy owner jointly with one or more other persons as joint policy owners,
the insured policy owner shall be entitled to compensation from the PPF General Fund of the aggregate amount of the protected liabilities in respect of all such insured policies.
(2) Where any of the insured policies referred to in subsection (1) is an insured policy covered under the PPF General Fund which provides third party benefits, the insured policy owner or any beneficiary or both shall be entitled to compensation from the PPF General Fund of the full amount of the protected liabilities in respect of such insured policy.
49.
—(1) Where there are 2 or more insured policy owners in respect of any insured policy, each of those insured policy owners is entitled, as at the quantification date, to compensation from the PPF Life Fund or the PPF General Fund, as the case may be.
(2) For the purposes of determining the share of an insured policy owner in an insured policy under subsection (1), each insured policy owner holding such insured policy shall be deemed to have an equal share in the insured policy unless there is an express provision to the contrary in the books of the failed PPF Scheme member.
(3) For the avoidance of doubt, subsection (2) does not affect any rights as between the insured policy owners themselves.
50. Where, in respect of any insured policy, the Agency has paid —
(a)
to any insured policy owner the full amount of compensation payable to him in respect of the insured policy in accordance with this Act; or
(b)
to any insured policy owner or beneficiary or both, the full amount of compensation payable to him or them in accordance with this Act, in the case where the insured policy is covered under the PPF General Fund and provides third party benefits,
no other person is entitled, in respect of those insured policies, to compensation under this Part.
51.
—(1) The Agency shall compute the amount of compensation due to an insured policy owner in respect of his insured policies, or a beneficiary in the case where an insured policy is covered under the PPF General Fund and provides third party benefits, issued by a failed PPF Scheme member in accordance with this Act.
(2) In determining —
(a)
the eligibility and entitlement of an insured policy owner to compensation and computing the amount of compensation due to an insured policy owner; and
(b)
the eligibility and entitlement of a beneficiary under an insured policy which is covered under the PPF General Fund and provides third party benefits to compensation and computing the amount of compensation due to such a beneficiary,
the Agency is entitled to rely on the books of the failed PPF Scheme member and any other books which, in the opinion of the Agency, are relevant for such computation.
(3) Subject to subsection (4), the Agency shall pay the compensation in such form and manner as may be specified in the Rules.
(4) The Authority may make regulations for the purposes of payment of compensation by the Agency.
(5) Without prejudice to the generality of subsection (4), such regulations may —
(a)
specify the person to whom, or the account into which, payment of compensation is to be made for the benefit of an insured policy owner who is entitled to compensation, or a beneficiary who is entitled to compensation under an insured policy which is covered under the PPF General Fund and provides third party benefits, under this Act; and
(b)
provide for the payment of compensation into an equivalent account with a financial institution and for such compensation to be held in that account in a manner equivalent to the manner of holding of the original insured policy.
52.
—(1) Upon payment out of the PPF Life Fund or the PPF General Fund of any compensation under this Act to, or for the benefit of, any insured policy owner in respect of his insured policy, or any beneficiary in the case of any insured policy which is covered under the PPF General Fund and provides third party benefits, the Agency shall be subrogated to the extent of such payment to all the rights and remedies of —
(a)
the insured policy owner;
(b)
the beneficiary; or
(c)
the person who received the compensation on behalf of the insured policy owner or beneficiary,
as the case may be, in respect of the insured policy in priority over —
(i)
the rights and remedies of the insured policy owner or the person who received the compensation on behalf of the insured policy owner, as the case may be, in relation to that insured policy;
(ii)
in the case where the insured policy is covered under the PPF General Fund and provides third party benefits, the rights and remedies of the beneficiary or the person who received the compensation on behalf of the beneficiary, as the case may be, in relation to that insured policy; and
(iii)
the rights and remedies of any person who is subrogated, whether or not before the Agency’s subrogation, to the rights and remedies of any of the persons referred to in paragraphs (a), (b) and (c) in relation to that insured life policy,
and may maintain an action in respect of those rights and remedies in the name of the person referred to in paragraph (a), (b) or (c), as the case may be, or in the name of the Agency, subject to subsection (2).
(2) 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) or (c), as the case may be, the following provisions shall apply:
(a)
in the case where the failed PPF Scheme member is not wound up, the Agency shall be entitled to recover the full amount of compensation claimed against the failed PPF Scheme member, notwithstanding any liabilities owing by the insured policy owner to the PPF Scheme member; and
(b)
in the case where the failed PPF Scheme member is wound up, the insolvency rules relating to set-off shall not apply in relation to the rights and remedies of the insured policy owner.
(3) For the purposes of subsection (1), where the Agency is unable to effect payment to an insured policy owner, or a beneficiary in the case where the insured policy is covered under the PPF General Fund and provides third party benefits (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 PPF Life Fund or the PPF General Fund, as the case may be, of compensation under this Act to, or for the benefit of —
(a)
an insured policy owner in respect of his insured policy; or
(b)
in the case where the insured policy is covered under the PPF General Fund and provides third party benefits, a beneficiary,
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 policy owner or the beneficiary, as the case may be.
(4) The persons referred to in paragraphs (a), (b) and (c) 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 PPF Scheme member until the Agency has been reimbursed in full the amount of compensation paid to those persons.
(5) Notwithstanding any provision in the Companies Act (Cap. 50), the Agency shall be entitled —
(a)
in the case where the failed PPF Scheme member is wound up, to be reimbursed out of the assets of the failed PPF Scheme member for the expenses incurred in —
(i)
the payment of any compensation to insured policy owners and beneficiaries including any interest charged on moneys borrowed by the Agency for the purpose of making payment of any compensation under the PPF Scheme; and
(ii)
the lodging of a claim with the liquidator of the failed PPF Scheme member for any compensation that has been paid out to insured policy owners and beneficiaries; or
(b)
in any other case, to be reimbursed by the failed PPF Scheme member or the provisional liquidator of the failed PPF Scheme member, as the case may be, for the expenses incurred in —
(i)
the payment of any compensation to insured policy owners and beneficiaries including any interest charged on moneys borrowed by the Agency for the purpose of making payment of any compensation under the PPF Scheme; and
(ii)
the lodging of a claim with the provisional liquidator of the failed PPF Scheme member for any compensation that has been paid out to insured policy owners and beneficiaries.
(6) 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).
(7) 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 policy owners and beneficiaries under this Act, 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:
(a)
the manner in which moneys paid by the Agency to the Public Trustee are to be paid to insured policy owners and beneficiaries under this Act;
(b)
the fees to be paid by the Agency to the Public Trustee and the manner of payment of such fees;
(c)
such other matters as the Authority considers necessary.
(8) The provisions in the Fifth Schedule shall apply in relation to the holding and payment of compensation by the Public Trustee to insured policy owners and beneficiaries under this Act.
(9) 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.
53.
—(1) If —
(a)
any compensation paid to, or for the benefit of, an insured policy owner out of the PPF Life Fund or the PPF General Fund is in excess of what ought to have been paid to the insured policy owner under this Act;
(b)
any compensation paid to, or for the benefit of, a beneficiary in the case where the insured policy is covered under the PPF General Fund and provides third party benefits out of the PPF General Fund is in excess of what ought to have been paid to the beneficiary under this Act; or
(c)
any compensation is paid in error to any person,
the Agency may recover the amount paid in error or excess from the person who received the compensation, in such manner and within such period as may be specified by the Agency to that person.
(2) 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.
(3) 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 PPF Scheme member, whichever is the later.
(4) Upon the recovery of any amount paid in error or excess from any person under this section (referred to in this section as the recovered amount), the Agency shall do the following:
(a)
in the case where the failed PPF Scheme member is not wound up or where the winding up of the failed PPF Scheme member has not completed and the Agency has not recovered or has not recovered in full from the failed PPF Scheme member or its liquidator, as the case may be, the compensation which it paid out to the insured policy owners or the beneficiaries in the case where the insured policies are covered under the PPF General Fund and provides third party benefits, the Agency shall deduct from the recovered amount the shortfall in compensation and pay such deducted amount to the PPF Life Fund or the PPF General Fund, as the case may be, and pay the amount remaining from the recovered amount after the deduction, if any, to the failed PPF Scheme member or its liquidator, as the case may be;
(b)
in the case where the failed PPF Scheme member is not wound up or where the winding up of the failed PPF Scheme member has not completed and the Agency has recovered from the failed PPF Scheme member or its liquidator, as the case may be, in full the compensation which it paid out to the insured policy owners or the beneficiaries in the case where the insured policies are covered under the PPF General Fund and provides third party benefits, the Agency shall pay the recovered amount to the failed PPF Scheme member or its liquidator, as the case may be;
(c)
in the case where the winding up of the failed PPF Scheme member has completed and the Agency has not recovered or has not recovered in full from the liquidator the compensation which it paid out to the insured policy owners or the beneficiaries in the case where the insured policies are covered under the PPF General Fund and provides third party benefits, the Agency shall deduct from the recovered amount the shortfall in the compensation and pay such deducted amount to the PPF Life Fund or the PPF General Fund, as the case may be, and pay the amount remaining from the recovered amount after the deduction, if any, to the Official Receiver to be placed to the credit of the Companies Liquidation Account; and
(d)
in the case where the winding up of the failed PPF Scheme member has completed and the Agency has recovered from the liquidator in full the compensation which it paid out to the insured policy owners or the beneficiaries in the case where the insured policies are covered under the PPF General Fund and provides third party benefits, the Agency shall pay the recovered amount to the Official Receiver to be placed to the credit of the Companies Liquidation Account.
(5) 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).
54.
—(1) In determining —
(a)
whether the PPF Life Fund or the PPF General Fund is to be utilised to fund any transfer of the whole or part of the insurance business of the failed PPF Scheme member to another insurer or run-off of the insurance business of the failed PPF Scheme member pursuant to section 46; and
(b)
the amount of the PPF Life Fund or the PPF General Fund to be utilised,
the Authority shall (without prejudice to any other factors that the Authority may consider relevant) have regard to —
(i)
the cost of transferring the whole or part of the insurance business of the failed PPF Scheme member or the cost of the run-off, as the case may be, as compared to the cost of paying compensation to the insured policy owners or the beneficiaries in the case where the insured policies are covered under the PPF General Fund and provide third party benefits; and
(ii)
the impact of not transferring the whole or part of the insurance business of the failed PPF Scheme member or not proceeding to run-off the insurance business of the failed PPF Scheme member, as the case may be.
(2) For the purposes of subsection (1), the Authority shall, prior to notifying the Agency of its determination under section 46, obtain the approval of the Minister for the amount to be paid out of the PPF Life Fund or the PPF General Fund, as the case may be, by the Agency.
(3) Where the insurance business of a failed PPF Scheme member is transferred to another insurer or the insurance business is run-off by the Agency or any person appointed to carry on such run-off —
(a)
the benefits that an insured policy owner is entitled to receive under his insured policy; or
(b)
the benefits that an insured policy owner or a beneficiary or both, as the case may be, are entitled to receive under an insured policy which is covered under the PPF General Fund and provides third party benefits,
in the event that the contingency upon which policy moneys are payable occurs after the transfer or during the run-off of the insurance business, shall be an amount not less than the protected liabilities in respect of his or the insured policy.
(4) For the purposes of subsection (3), the protected liabilities in respect of an insured policy of the insured policy owner shall be computed in accordance with the Third Schedule.
(5) The Agency shall be entitled to be reimbursed by the failed PPF Scheme member or the provisional liquidator of the failed PPF Scheme member, as the case may be, for the expenses incurred in —
(a)
in the event of a transfer of the whole or part of the business from the failed PPF Scheme member to another insurer, the costs and expenses of such transfer; and
(b)
in the event of the run-off of the whole or part of the business of the failed PPF Scheme member, the costs and expenses of setting up a company to run-off the insurance policies and outsourcing the administration of the insurance policies to a third party.
55.
—(1) Subject to subsection (3), notwithstanding any written law or rule of law, where —
(a)
the Agency has paid compensation to an insured policy owner, a beneficiary of an insured policy which is covered under the PPF General Fund and provides third party benefits, or both, as the case may be, out of the PPF Life Fund or the PPF General Fund in accordance with this Act;
(b)
such compensation is, or will be, accorded priority in the event of the winding up of the failed PPF Scheme member under section 49FR of the Insurance Act (Cap. 142); and
(c)
the failed PPF Scheme member has one or more existing claims against the insured policy owner,
the liquidator may bring legal proceedings with respect to those claims in the name, and on behalf, of the failed PPF Scheme member against the insured policy owner or any person who received compensation on behalf of the insured policy owner, to recover such moneys as may be necessary to put the failed PPF Scheme member into the position it would have been as against the insured policy owner with respect to those claims, if —
(i)
the Agency had not paid out any compensation or been accorded priority under section 49FR of the Insurance Act in respect of the compensation paid to the insured policy owner; and
(ii)
the liquidator had applied the same rules with regard to the respective rights of debts provable and the valuation of future and contingent liabilities as are in force for the time being under the law relating to bankruptcy in relation to the estates of persons adjudged bankrupt, as if the failed PPF Scheme member were a person so adjudged.
(2) Such moneys shall be recoverable as a debt due to the failed PPF Scheme member by the insured policy owner or any person who received compensation on behalf of the insured policy owner.
(3) This section shall not apply to any moneys held by the Public Trustee pursuant to any payment of compensation by the Agency under section 52(3).