Section 20

Every insurer registered under this Order shall establish and maintain in accordance with this section an insurance fund in respect of the class or each of the classes of insurance business carried on by the insurer in Brunei Darussalam so far as that business relates to Brunei Darussalam policies.

The Authority may require any registered insurer to establish and maintain, in addition to the insurance funds under subsection (1) such other insurance fund as the Authority may determine for different types of policies in respect of each class of business.

There shall be paid into an insurance fund all receipts of the insurer properly attributable to the business to which the fund relates (including the income of the fund), and the assets comprised in the fund shall be applicable only to meet such part of the insurer’s liabilities and expenses as is properly so attributable.

In the case of a fund established in respect of life business, no part of the fund shall be allocated by way of bonus to participating policies, except with the approval of an actuary and out of a surplus of assets over liabilities as shown on the last statutory valuation of the fund; and on the making of any such allocation that surplus shall be treated for the purposes of this section as reduced by the amount allocated.

If on the last statutory valuation in the case of a fund established in respect of life business there was shown a surplus of assets over liabilities of the fund, there may, subject to the approval of an actuary and to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the surplus, and on the making of any such withdrawal that surplus shall be treated for the purposes of this section as reduced by the amount withdrawn:

Provided that no part of the surplus attributable to participating policies other than reinsurance policies shall be withdrawn in excess of one quarter of the amount allocated thereout by way of bonus to participating policies.

Incorporating amendments until S 1/2016

(Clean copy) NANI/H.AFIF/fiqah _ as of 3rd July 2020

20

BLUV as at 14th January 2016

If in the last statutory balance sheet in the case of an insurance fund established in respect of general business there was shown a surplus of assets over liabilities of the fund, there may, subject to any provision to the contrary in any instrument or contract binding the insurer, be withdrawn from the fund an amount not exceeding the excess of the surplus over any fund margin of solvency prescribed for that fund under section 21, and on the making of any such withdrawal that surplus shall for the purposes of this section be treated as reduced by the amount withdrawn.

In respect of any policy belonging to the insurer’s life business which is under subsection (4) of section 19 removed from the insurer’s register of Brunei Darussalam policies there may be withdrawn from an insurance fund to which the policy relates an amount not exceeding the prescribed amount.

Any amount withdrawn from an insurance fund under subsection (5), (6) or (7)

and, in a winding-up, any part of an insurance fund remaining after meeting the liabilities and expenses to which the fund is applicable may be dealt with as if it had not formed part of the fund except that in the case of a winding-up where any other insurance fund of the insurer under this Order is in deficit the surplus remaining after the winding-up shall first be applied to make good the deficit in that fund.

In a winding-up, assets comprised in the deposit made by an insurer under section 16 in respect of either class of business may be allocated by the Authority to any insurance fund established by the insurer for that class of business in such manner and proportion as it sees fit, and assets so allocated shall be treated as assets of the insurance fund, and subsections (3) and (8) shall apply to those assets accordingly.

Any insurance fund established by an insurer for any class of business shall, notwithstanding that the insurer at any time ceases to carry on that class of business in Brunei

Darussalam, continue to be maintained by the insurer so long as the insurer is required by this

Order to maintain the register of policies belonging to that class.

Incorporating amendments until S 1/2016

(Clean copy) NANI/H.AFIF/fiqah _ as of 3rd July 2020

21

BLUV as at 14th January 2016

In the case of an existing insurer, an insurance fund shall be established as at the date of establishment of the register under subsection (9) of section 19 and by reference to the policies registered or required to be registered in it as at its establishment, and by reference to the assets and liabilities of the insurer as at that date; and

The amounts referred to in paragraph (a) of subsection (11) are as follows –

The assets of any insurance fund established by an insurer under this Order shall be kept separate from all other assets of the insurer.

Any person who fails to comply with this section 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 not exceeding $10,000 for every day during which the offence continues after conviction.

Incorporating amendments until S 1/2016

(Clean copy) NANI/H.AFIF/fiqah _ as of 3rd July 2020

22

BLUV as at 14th January 2016

Paid-up capital and margins of solvency.