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Action by Authority if relevant person unable to meet obligations, etc.

Insurance Act 1966

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—(1) The Authority may exercise one or more of the powers specified in subsection (2) as appears to it to be necessary where —(a)the Authority is satisfied that —(i)the affairs of any relevant person are being conducted in a manner which is likely to be detrimental to the public interest or the interest of the policy owners or prejudicial to the interest of the relevant person;(ii)a relevant person is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it is about to suspend payments;(iii)a relevant person has contravened any of the provisions of this Act; or(iv)a relevant person has failed to comply with any conditions attached to its registration (if any), or licence, as the case may be;(b)a relevant person informs the Authority that it is or is likely to become insolvent, or that it is or is likely to become unable to meet its obligations, or that it has suspended or is about to suspend payments;(c)a relevant person becomes unable to meet its obligations, or is insolvent, or suspends payments; or(d)the Authority considers it in the public interest to do so.(2) The Authority may exercise all or any of the following powers for the purposes of subsection (1):(a)issue such directions to require the relevant person to take any action or to do or not to do any act or thing whatsoever in relation to its business as the Authority may consider necessary, including —(i)recruiting such management personnel as may be necessary to enable it to conduct its business in accordance with sound insurance principles;(ii)removing any of its directors or any person whom the Authority considers unfit to be associated with it;(iii)taking action as to the disposition or recovery of its property;(iv)taking any available steps for the recovery by the relevant person (as the case may be) of sums appearing to the Authority to have been illegally or improperly paid;(v)in the case of a licensed insurer, stopping the renewal or issuance of further policies of the class of business which the insurer is carrying on;(vi)making such arrangements with respect to reinsurance as the Authority so specifies; or(vii)taking action to make good any default under section 15, 16, 17, 18, 19, 81 or 82;(b)subject to subsection (3), assume control of and manage such of the business of a licensed insurer as the Authority may determine, or appoint one or more persons as statutory manager to do so on such terms and conditions as the Authority may specify.(3) In the case of a licensed insurer incorporated outside Singapore, any appointment of a statutory manager or any assumption of control by the Authority of any business of the licensed insurer under subsection (2) is only in relation to —(a)the business and affairs of the licensed insurer carried on, or managed in or from, Singapore; and(b)the property of the licensed insurer located in Singapore, or reflected in the books of the licensed insurer in Singapore (as the case may be) in relation to its operations in Singapore.(4) Where the Authority appoints 2 or more persons as the statutory manager of a licensed insurer, it must specify, in the terms and conditions of the appointment, which of the duties, functions and powers of the statutory manager —(a)may be discharged or exercised by such persons jointly and severally;(b)must be discharged or exercised by such persons jointly; and(c)must be discharged or exercised by a specified person or such persons.(5) Where the Authority has exercised any power under subsection (2), it may, at any time and without prejudice to its power under section 13(3)(p), do one or more of the following:(a)vary or revoke any requirement of any appointment made by or any action taken by the Authority in the exercise of such power, on such terms and conditions as it may specify;(b)further exercise any of the powers under subsection (2);(c)add to, vary or revoke any term or condition specified by the Authority under this section.(6) No liability shall be incurred by a statutory manager as a result of anything done (including any statement made) or omitted to be done with reasonable care and in good faith in the course of or in connection with —(a)the exercise or purported exercise of any power under this Act;(b)the performance or purported performance of any function or duty under this Act; or(c)the compliance or purported compliance with this Act.(7) Any relevant person who fails to comply with any direction of the Authority under this section shall be guilty of an offence and shall be liable on conviction —(a)in the case of an individual, to a fine not exceeding $125,000 or to imprisonment for a term not exceeding 3 years or to both and, in the case of a continuing offence, to a further fine not exceeding $12,500 for every day or part of a day during which the offence continues after conviction; or(b)in any other case, to a fine not exceeding $250,000 and, in the case of a continuing offence, to a further fine not exceeding $25,000 for every day or part of a day during which the offence continues after conviction.[41

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