[4th January 2008] Strpplement to Official Gazette t a l

TNSURANCE ACl2008

(Acr tr oJ'2008)

ARIi.ANG EMEI\T OF SBCTIONS

Sect ions

PART I . PRELIMINARY

I. Short t i t le2. lnterpretation3. Administrat ion of Act4. Category of insurance business5. Appl icat ion ofAct

PART TI _ LICENSING OF INSURANCE BUSINESS6. Geireral restrictions on insurance business1. Restriction on composite insurance business8. Reinsurance9. Application for a licence as insurer10. Grant of a l icence1 l . Condit ions of l icence12. Branches and displav of licence13. Register

PART III _ SOLVENCY REQUIREN{ENTS14. Maintenance of financialiy sound condition15. Solvency margin16. Technical reseryes11. Separation offund18. Designated fund19. Statutory reserve fund20. Prohibi t ionsconcerningassets21 . Examination of reinsurance treaties22. Remedial measures23. Solvencyregulat ions

PART IV _ REGULATION OF BUSINESS OF INSURER24. Stated capital and deposit25. Shares and debentures26. Registration of shares in name of nominee27. Limitation on control of insurers28 Eff-ect of registration of shares contrary to Act29. Furnishing of information on shareholdins30. Management of an insurer31. Dut ies of directors32. Avoiding conflict of interest33. Requirement to abstain34. Consequences of conflict of interest35. Avoidance ofcontract36. Appointmenrsot 'pr incipaloi f icers37. Fit and proper personj8. Board sub-conrmit tees

1 0 8 Supplement to Official Gazette [4th January 2008]

39. Intemal control svstems

PART V - AUDITORS, ACTUARIES, ACCOUNTSAND RETURNS

40. Appointment of auditor and actuary4l. Notice of resignation and termination42. Termination of appointment by Authority43. Auditor's and actuary's duty to report44. Additional duties of the auditor45. Actuarial assessment46. Separat ionofaccounts41. Accounts, balance sheet and other returns48. Audit and auditor's certificate49. Submission and publication of returns50. Eramination of returns51. Keeping of records and registers

PART VI _ TRANSFBR AND AMALGAMATION

52. Approval required fortransfer and amalgamation53. Confirmation of schemes54. Documents to be fil led when schemes confirmed55. Application to Court for directions

PART VII _ INSOLVENCY AND WINDING UP

Sub Part A - General Provisions56. General provisions on winding up51. Continuation of business by liquidator58. Proof of claims59. Valuation of assets and liabilities60. Application of funds on winding up

Sub Part B - Voluntary Winding up61. Voluntary winding up62. Rights of policyholders and creditors63. Distribution of assets64. lnsufficient assets

Sub Part C- Winding up by the Court65. Winding up by Court66. Reduction of contract

PART VIII - OTHER INSURANCE PROFESSIONALS

6'7 . Licensing of insurance managers, insurance agents and insurance brokers68. Obligations of an insurer in relation to insurance agents69. Financial statements and returns by insurance managers, insurance agents and

insurance brokers10. Separate accounts for premium received71. Obligations of insurance broker'12.

Registration of Principal Insurance Representative'73. Annual fee for Principal Insurance Representative

[4th January 2008] Supplement to Official Gazette 109

74. Obl igat ionsofPrincipal lnsuranceRepresentat ive7 5. Registration of Sub-Agents16. Annual fee for Sub-Agentsl1 . Obl igat ions of Sub-Agents78. Claims profbssionals

PART IX _ PROTECTION OF POLICYHOLDERS79. Certain provisions to be void80. Inlbrmation on policies8l . Free choice of pol icy82. Annuai statement to cerlain policyholders83. Undesirable business practice84. Abandoned funds85. Protection of policyholders86. Assumption of risk by general insurer87. Premium rate under long term policy88. Policy Owners' Protection Fund89. Contribution to the Policy Orvners'Protection Fund90. Management of the Policy Owners' Protection Fund9l . Prescription of claims

PART X. INSPECTION AND INVESTIGATION92. Porver of the Authority to issue direction93. Request of information94. On-si te inspect ion95. Investigation96. Suspension of licence91 . Effect of suspension of licence98. Porver to enter prcmises99. Tampering rvith evidence100. Meaning of certain words

PART XI _ADMINISTRATOR AND CONSBRVATOR101 . Appointment of admir-ristrator102. Duties and powers of administrator103. Cancellation of suspension of licence104. Appointment of conservator105. Duties and powers of conservator106. Term of office and remuneration of conservator107. Rehabilitation or re-organisation of insurer108. Immunity of the admirristrator and the conservator

I'ART XII - TERMINATION OF LICENCEI 09. Surrender of licenceI 10. Revocation of licencel1l . Effect of revocat ion

PART XITT - MISCELLANEOUSll2. Freezing orderI 13. Injunct ivc rel iefand locus

t i 0 Supplement to Official Gazette [14th January 2008]

I 14. Exchange of information and mutual assistancei15. Prohibi t ions on use of cef iain wordsI 16. Advert isement111. Porver to extend t ime l imitI 1 8. Insurance business conducted in breach ofActI 19. Miscel laneous off-ences120. Public notice121. Confidentiality122. Special concessions for certain insurers123. Judicial review124. Regr.rlations125. Repeal126. Transitional

[14th January 2008] Supplement to Official Gazette i 1 1

INSURANCE ACT.2OO8

(Act II of 2008)

I assent

a t t

, , . { ^ l l

/ / | t , [ J v\ t\l y\.r'^1\-_ J. A. Michel

President

30th December 2007

AN ACT to make provision for the regulation of the insurance business and to repeal theInsuranceA ctrl994.

ENACTED by the President and theNationalAssembly.

. PART 1-PRELIMINARY

1. This Act may be cited as the Insurance Act, 2008 and shall come into operation onsuch date as the Minister may, by Notice in the Official Gazette, appoint.

2. ln thisAct-

"Act" includes regulations made under this Act;

"actuary" means a person -

(a) holding such actuarial qualifications as may be prescribed; and

(b) appointed as actuary of an insurer with the approval of the Authority in termsofsection 40;

"administrator" means an administrator appointed under section l0l ;

Short Title

Interpretation

n 2 Supplement to Official Gazette [14th January 2008]

"advertisement" inclr-rdes every form of adver-tising, rvhether in a publication or by thedisplay of notices or by means of circulars or other documents or by an exhibition ofphotographs or cinematograph fihns or by way of sound broadcasting, television orany other electronic media;

"affil iated company" means a company which -

(a) stands in relation to another body corporate as a holding company or ultimateholding company or subsidiary company ofthat body corporate; or

(b) is a body corporate that is a parent or subsidiary ofa body corporate referred toin paragraph (a); or

(c) is in relation to another body corporate, a member of the same group ofcompanies by virtue of common ownership or control;

"assigned capital" in reiation to a foreign company incorporated outside Seychellesand having a branch in Seychelles, means capital consisting of funds transferred fromabroad and such other funds as may be determined by the Authority;

"associate" in relation to -

(a) a natural person, means -

(i) his orher spouse;

(ii) his or her child, parent, brother, sister, stepchild or stepparent and anyspouse ofany such person;

(iii) another person rvho has entered into an agreement or arrangement rviththat natural person, relating to the acquisition, holding or disposal of, orthe exercising of voting rights in respect of, shares in the insureruuuuc r r ' l eO ,

(iu) a legal person the board of directors of which acts in accordance with hisor her directions or instructions;

(v) a trust administered by him or hir;

(b) alegalperson- .

(i) which is a company, means its subsidiary or its holding company andany other subsidiary or holding company thereof;

(ii) rvhich is not a company, means another legal person which would havebeen its subsidiary or holding company -

(A) had it been a company; or

(B) in the case where that other legal person, too. is not a company,had both it and that other legal person been companies;

(ii i) means any person in accordance with whose directions or instructionsits board ofdirectors acts.

[4th January 2008] Supplentent to Official Gazette 1 1 3

(iv) means another legal person whose board of directors acts inaccordance with i ts directions or ins[ructions.

(v) means a trust controlled or administered by it;

"auditor" nleans a person -

(a) who has qualified as an accountant by examination ofone ofthe lnstitutes ofChartered Accountants in England and Wales, Ireland and Scotland, or theCanadian Institute of Chartered Accountants, or the American Institute ofCertified Public Accountants, and who is a current member of goodstanding of one of the above lnstitutes or a person of good standing withsome other accountancy qualification who is recognised by theAuthority assuch forthe purpose ofthisAct;

(b) appointed as auditor of an insurer with the approval of the Authority undersection 40;

"Authority" means the Central Bank of Seychelles established by the Central Bank ofSeychelles A ct,2004;

"bank" has the same meaning as in the Financial InstitutionsAct,2005;

"captive insurance business" means an insurance business where the insured is anaffiliated company ofthe insurer;

"category", in relation to an insurance business, means general insurancebusiness or long term insurance business;

"claims professional" means a person referred to in section 78;

"class", with reference to insurance policies, means a class of policies of suchdescription as may be specified in the First Schedule within the long terminsurance business or general insurance business, aS the case may be, andincludes part of a class;

"Companies Act" means the Companies Act 7972, and any Act replacing the saidAct:

"conservator" means a conservator appointed under section 104;

"Court" means the Supreme Court of Seychelles;

"designated fund", in relation to section 18, means a fund established by a longterm insurer in respect of a class of its long term insurance business or part of aclass ofsuch business:

1 1 4 Su pp I e m e nt t o O1fi.c i a I G azett e I i4th January 2008]

Cap. 40

Cap. 40

"director" has the meaning assigned to it in the Corlpanies Act, and includes irithe case of-

(a) a fbreign company, an authorisetl agent;

(b) a partnership, the manager or a partne r entitled to nanage the partnership;

(c) any other body. whether corporar.c or unlncorporatc, a pcrson cxcrcisingalone or with other persons, the direction and control of the managementof its business or affairs; and

(d) a soleproprietorship, the individual prcprietor;

"established surplus" and "established deficit", in relation to section 1 8(4), meanany amount shown by an actuarial investigation tc be an amount by which theassets representing a designated fund, or representing any part of such fund,exceed or, as the case may be, are less than, the liabilities of the insurerattributable to that fund orthat part ofthe fund;

"financial statements" has the same meaning as in the Companies Act;

"foreign company" has the same meaning as in the Companies Act;

"general insurance business" has the meaning assigned to it by section 4;

"general insurer" means an insurer conducting general insurance business;

'ogeneral insurance policy" means a policy, other than a long term insurancepolicy, of a class specified in Part II of the First schedule, and includes a policywhich contains related or subsidiary provision within another class, and areinsurance contract in respect ofsuch policy;

"insurance agent" means a person who, with the authority of an insurer and notbeing an employee of the insurer, acts on behalf of the insurer in the initiation ofthe insurance business, the receipt of proposals, the issue of policies, thecollection ofpremiums orthe settlement of claims;

"insurance broker" means a person who arranges insurance business withinsurers on behalf of prospective policyholder, or as a representative of apolicyholder, and includes a reinsurance broker carrying on reinsurancebrokering for an insurer;

"insurance business", subject to section 4, means the business of undertakingliability, by way of insurance or reinsurance, under long term insurance policiesor general insurance policies, as the case may be, and includes extental insurancebusiness and the business ofa professional reinsurer;

"insurance manager" means a person who carries on,.or holds himself out ascarrying on, the business of managing insurance business originating fronroutside Seychelles, and whose activities consist o1'accepting an appointmentfrom any insurer-

l i4 th January 20081 Strpplernent io OlJicial Gozene 1 1 5

( a )

( b )

( c )

to managc anv pai i of r ts busincss; oi

to exerclse ntanageriai i lnct ions in the insirrer 's business; or

to be respolts iolc for nt i intair t ing accor-rnts or other records of such an insurel ;and i t l th is cott tcxt, " t lanagentent" includes authorirv to enter into contracts ofinsurancc on behalf oi thc insurerunclerthe tenrs ol ' thc appoinirnent;

" insurance pol icy" ' inclucles a contraci of i i rsurance to provicle pol icy benei i rs;

"ittsttrance sub-agent" means a person (not beinu an insurer, insurance ntaltager,lnsllrance agent or insurance broker) rvho solicits directiy or through adveriising orother trearts, doniestic business on behalf of an ins'.rrer, insurance ageni or insurancetrroker,

"insurer" means a person carn'ing on a category of insurance business,

"iinked long term policy" means a long term insurance pciicy ofthe class described inPart I ofthe First Schedule :

"long terrn insurance business" has the meaning assigned to it by se ction 1+;

" lot tg tert t t insttrcr" lneans an insurer l icensed lo carry on long tcrnr insuranceDU S I i ICS S ;

"long tetm insurance policy" means a policy of a class specified in Part I of the FirstSchedule and includes a policy which contains related or subsidiary provision rvithinanother class, and a reinsurance contract in respect ofsuch policy;

"managi i rg agent" has the sane meaning as in sect ion 310 ( l ) (c) of the Companies cap.40Act;

"matching assets" Ineans the representation of underrvriting liabilities expressed in aparticrllar currency by assets expressed orrealisable in the same currcnoy;

"Minister" nteans the Minister responsibie fbr Finance;

"non-domestic insurance business" rneans insurance bnsiness which is restricted by alicence issued under the Act and subject to such other rcstrictions or limitations asmay be prescribed, to only non-Seycirelles policies, and includes cepti\/e insurancebusincss;

"non-Set'chelles policy" means an insurance polic:y rvhicir is issued by an insurerl iccnsed under this Act in relat ion to r isks si tuatcd outside Seychel les;

"principal o1'1lccr" nreans a clirector, tl ie chicf cxecutive oflcer, the senior nlanaller

Strpplenent to Olficial Gazette I i4th January 2008]

or the chief internal auditor, and includes a person however dcsignated holding simi larposit ion and responsibi l i t ies;

"policy benetlts" means one or more sums of money, services or other benefits, andincludes, in the case of a long te rm pol icy, an annLri t l ' ;

"policyholder" means a person wiio enters into a contract of insurance, ancl includes aperson entitled to be provided with or entbrce the policy benefits under an insurancepol icy;

"premium" means the consideration given or to be given in retllrn fbr an underlaking toprovide policy benefits under specified circunrstances;

"prescribed" means prescribed by regulations ;

cap.40 "principal insurance representative" means a person who maintains for an insurercarrying on non-domestic insurance business under this Act, full and proper records ofthe insurance business ofthe insurer and who is not an employee ofthat insurer;

"proprietary company" and "contpany" have the same meaning as in the CompaniesAct,

"professional reinsurer" means a corporation iicensed under this Act only lo carry onreinsurance business only;

"protected cell company" means a conlpany incorporated as, or converted into, aprotected cell company in accordance with the Protected Cel1 CompaniesAct;

"Protection Fund" means the Policy Owners'Protection Fund established under section8 B ;

"reinsurance contract" means a contract rvhereby an insurer reinsures the risk insured byhim, orpart oithat risk, ivith another insurer or reinsurer,

"reinsurer" means a person who carries on reinsurance business;

cap.20 "resident" has the same meaning as in the Business Tax Act;

"risk" means a possibility that a particular event may occur during the period for which atiinsurance poiicy is operative;

"Seychelles policy" means an insurance policy which is issued by an insurerlicensed under this Act in relation to risks situated in Seychelles;

"share", in the case of any body corporate or unincorporated other than a company,means an interest in the capital ofthat body;

"significant shareholder" nleans a person rvho alone or rvith associates, in relation to aninsurer-

(a) holds shares in the insurer of rvhich the amount subscribed in respect of the statedcapital represents 35 percent or more of tire total amount subscribcd in respect ofthe stated capital ofthe insurer;

1 1 6

[14th January 2008] Supplentenl to Olficial Gazette 111

(b) holds shares rvhich ent i t le such person to erercise more than 35 perccnt of thevoting rights attached 1o the alnolurt sr.rbscribed in respcc'L of thc statecl capitalof that insurer:

(c) in the casc of an insurer beinc a protectccl cel l conrpanrv, holds 50 percent ormore of thc cel lshares issue d in respect of any ce l l of that compan),;or

(d) has the porver to determine the appointrnent of 5t) pelccnt or nrore of thedirectors of'tl iat ir.rsurer, including the porver -

( i ) to appoint or remove, without the concurrence of anothe r person, _5 0perccnt or ntore ofthe directors; or

(i!.) to prevent a person frorn being appointed as a director rvithout theuonscnt o1-another pcrson;

"solvency margin" means the solvency margin required under section l5;

"solvency regulations" means regulations made under section 23;

"stated capital" meaus such amount required as stated capitai and expressed inSeychelles rupees or, notrvithstanding any provision of the companies Act, in anyother ciirrency approved by the Authority, and includes in the case of-

(a) a iore ign company, its assigned capital;

(b) a partnership, iti; paid up capital;

(c) any othe r body, rvhether corporate or unincorporated, an amount correspondingio a non-distributable fund or deposit as may be specified by theAuthority;

(d) a soleproprietorship, a deposit or a professional indemnity insurance cover asmay be specified by theAuthority;

"subsidiary" has the meaning assigned to it by the Companies Act;

"substantiai sharehoider" has the same meaning as in the CompaniesAct;

"technical provisions", in the case of a long term insurance business, meansprovisions based on actuarial principles, required to be made in the accounts of aninsu.r'er to meet its underrvriting liabilities.

In adrninistering thisAct, the Authority shall have regard to the following objectives -

(a) maintaining fair, saf-e, stable and efficient insurance markets for thebenefit and protection oithe public;

(b) prontoting contldence in the insurance industry;

(c) ensuring fair treatment to policyholders;

(d) reducing as far as is reasonably possible the risk that the insurancebusiness is used in furtherance of, or fbr a purpose connccted rvith,any unlarvfirl activity; and

Cap. 40

Cap. 40

3 . ( 1 ) Administr ; i iosofAct

1 1 8 Sttpplentcnt to OfJicial Gu:ette !4th JanLrary 20081

(e) ensuring orderly grorvth ofthe insurance industry in Seychelles.

(2) The Authority sliall discharge its functions under this Act in a mar-]nerwhich it considers most appropriate for achieving the objectives set olrt in subsection ( I ), taking intoaccount-

the need to balance those objectives;

the responsibilities of insurers and other service providers in the insuranceindustry;

the benefit of promoting public understanding of the insurance industry;

the need to use resources committed to supervision in an eflicient andeconomic manner;

(e) the desirability of maintaining the good repute of Seychelles as a financialcentre and of enhancing its competitive position; and

(0 the best economic interests of Sevchelles.

4.( 1 ) For the purposes ofthis Act -

(a) insurance business is divided into two main categories, i.e long tenninsurance business and general insurance business;

(b) subject to subsection (2) -

(i,

"long term insurance business" means insurance business of anyofthe classes described in Part I ofthe First Schedule:

"general insurance business" means insurance business, other thanlong term insurance business, consisting ofthe classes described inPart II ofthe First Schedule.

(2) In determining the category of insurance business -

(a) the effecting or carrying out ofa contract ofinsurance rvhose_principal objectis within any one of the classes described in Part I of the Firit Schedule, butrvhich contains related and subsidiary provisions which are not rvithin anyone of those classes in that Part, shall be deemed to constitute lons terminsurance business:

(b) the reinsurance of risks under a contract of insurance shall be treated asinsurauce business ofthe class to rvhich the contract r.vould have beionsed ifit had been entered into by the re-insurer.

(a)

(b)

( c )

(d)

Category ofinsurancebusiness

(i)

[14th January 2008] .Supplemenr ro O.fliciul Ga:etre i l 9

(3 ) The Authority may by a determination rn r,vriting declare that a contract of insuranceshal l lornl part of a part icular c lass of insurance business, and thcieupon, the contract shal l be deemeclto form part of', and to be subje ct to the requirenrents pertaining to, that class.

(4) Subject to any enactment relating to the regulation of pension schernes and thenlanagelllent of pension funds, a lottg term insurer shall be etrtitled to conduct the business of effectinqar rd car rv ing or r t o f

contracts to manage pension funds br,rsiness or the investment of pensiorrfrrnds;

contracts of the kind mentioned in paragraph (a) that are combined with acontract of insurance covering either conservation of capital or payment of aminimum interest, or

(c) contracts on a group basis to provide pensions during the lifetime ofemployees as from their retirement and to their dependants should theemployees die in service or on pension.

5. ( I ) The Minister may, on the recommendation ofthe Authority, by regulations *

(a) exclude from the application ofthisAct or any provision thereof -

(a)

(b)

Appl icat ion ofAct

(, an association of underwriters carrying on any class of insurancebusiness;

an organisation rvhere -/ ; ; l

(ii,

(iv)

(A)

(B)

the provision of insurance benefits are incidental in natureand volume to its main activitv: and

the operation of such insurance activity is of minorimportance forthe insurance market; or

a professional reinsurer, or any other corporation to the extent ofitsexternal insurance business;

any other person or class ofpersons,

impose restrictions on the insurance of risks relating to assets situated inSeychelles with insurers not licensed under this Act;

declare certain services and activities ancillary to or connected withinsurance business as not constituting insurance business for the purposes ofany or all ofthe provisions ofthis Act.

(2) In casc of doubt as to whether an activity constitutes insurance business to whichthis Act applies, or lvhether insurance business is or is not being carried on in or from Seychelles, thematter shall be detemrine d by the Authority rvhich shall give pr-rblic notice of its deternrination.

(b)

(c)

Supplement to OJ/icial Gazette [4th January 2008]

PART II - LICENSING OF INSURANCE T]USINESS

::l;:i l"r, 6. ( I ) No person shall carry on, or holcl hirnself or-rt as calrying on, insurance business of anyon insurance category or class in or tiom Seychelle s exccpt under the authority of a licence issued by the Authoritybusiness undersect ion l0inrespectofthatcategoryorclassof insurancebusiness.

(2) A person resident in, or a body incorporated under the larvs ol , Seychel les shal l notwithout the approval of the Authority carry on, or hold itself out as carrl ing orr, insurancc business ofany class in or from a country or-rtside Seychelles.

(3) For the purpose s of this sectron, a person shall be deeme d -

(a) to carry on insurance business in or from Seychelles, where thar person performsan),act in Seychel les -

(, the object or result of which is that another person enters into, or offers toenter into, or renews or varies, an insurance contract, in terms of rvhich thefirst-mentioned person undertakes to provide policy benefits to the otherperson; or

(ii) in relation to an insurance contract, in tenns of which that personundertakes to provide policy benefits, and which act is aimed at *

(A) maintaining, servicing or surrendering, or otherwise dealing with,the insurance contract:

coliecting or accounting for premiums payable under theinsurance contract; or

receiving or submitting, or assisting or otherrvise dealing with theseitlement of, a clairn under the insurance contract;

(b) to be holding himself out as carrying on insurance business in or from Seycheiles,where-

(, by way of business as an insurer, he occupies premises in Seychelles, ormakes it krown by an advertisement or by an insertion in a directory or by

, means of letterheads that he may be contacted at a particular address inSeychel les;

(i, he invites a person in Seychelles, by issuing an insurance advertisement orotherwise, to enter into or to offer to enter into a contract of insurance; or

(iii) he conducts himself or performs any act from which it may reasonably beinferred that he intends or proposes to carry on insurance business in or fromSeychel lcs.

(4) For the purposes of this section, an advertisement issued or other invitation made, or anact performed by any person on behalfofor to the order ofanother pcrson shall also be construed as anadvertisement issued or invitation made or an act perfomed, as the case rnay be, by that other person.

t20

(B)

(c)

[14th January 2008] Supplentent to Olficial Gazette

(5) Any person rvho contravenes subsect ion ( 1) commits an offence and shal l , on convict ion,be liable to a fine not exceeding Rs 1 000,000 and to imprisonment for a term not cxceeding 3 years.

7.(l) Subject to the other provisioits of this section, no insurer other than a professionsl Restrictionsreinsurer shall cany on both long term and general insurance business. il;;i lf."' ',"

(2) TheAuthority shall not grant a licence in respect of- ousrness

(a) long term insurance business to an insurer already engaging, or a person who hasappl icd to be l icensed to engage, in general insurance business; or

(b) general insurance business to an insurer already engaging, or a person who hasapplied to be licensed to engage. in long term insurance business.

(3) Notwithstanding subse ctions ( I ) and (2), the Authority may authorise an insurer to carryon both long term insurance business and general insurance business where--

(a) either the long term insurance business or the general insurance business isrestricted exclusively to reinsurance;

(b) one class of insurance business is or will be incidental, in terms of premium income,to the principal insurance business ofthe insurer.

(4) Where authorisation is granted under subsection (3), the insurer shall nianage its longterm insurance and general insurance business separately, in such manner as may be determined by theAuthority.

(5) A person who contravenes subse ction ( 1) commits an offence and shall, on conviction, beliable to a fine not exceeding Rs 1000.000 and to imprisonment for a term not exceeding 3 years.

8. ( 1) An insurer licensed under this Part shall not undenvrite or reinsure risks from another Reinsuranceinsurer or otherwise carry on reinsurance business except where it is otherwise authorised expresslyby theAuthority on such conditions as itmay imposc.

(2) Notwithstanding section 7, a professional reinsurer licensed under section 10 may carryon reinsurance business ofany cat€gory or ofany classes except where specifically restricted.

(3) Nothing in this section shall be construed as a requirement for a reinsurer organised underthe laws of any country outside Seychelles and underwriting risks from insurers in Seychelles to belicensed under this Act.

9.(l) An application for a licence under this Part shall be made in such form, manner andApplicarirxfor a lice;tcemedium as theAuthority may speci{y and shall be accompanied by- as insurer

(a) a statement of the applicant's proposed insurance business, including details of the. class ofinsurance business to be carried on;

(b) particulars ofany substantial shareholder or ofany person being proposed to act asprincipal officer of tlie proposed insurer;

(c) a business plan or a feasibility study conducted by an actuary, as nray be applicableto any particular insurance business or class of business as determined by theAuthori t r ' :

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I ' l Supplement to Official Gazette l14th January 20081

(d) such other inlirrmation and docunrents as may be specifiecl in regulations; alcl

(e) rhe prescribed t-ec.

(2) On receipt of an appi icat ion, the Authori ty maysubsect ion ( I)(b) to provide such addit ional infornrat ion orde tc rmin ing t l rc app l i ca t ion .

(3) l 'he Authority nray rcquire that any infomration turnished b1, thc applicant or any otherperson referred to in subsection (2) bc verifiecl in such mal.)ner as it nray specify.

(4) Where an applicant fails.rviinin a reasonable period of tirne to comply with a requireirrentunder subsection (2) or (3), the Authority may by noticc given to the applicant detenriine that theappl icat ion shal l lapse.

(5) The applicant shall noJify the Authority of any material change which may haveoccurred, whether before or after the issue of the licence, in the inforrrration or documents submitted inconnection with an application.

(6) Any person rvho, in relation to an application under this section -

(a) nrakes a statement r.r,hich he knows to be false in a material particular; or

(b) recklessly makes a statement which is false in a material particular,

commits an offence punishable under section I 19.

:i,T[: . lo.t r I where the Authority is satisfied that an applicarion under secrion 9 ought ro be granted, ir

shall grant the application and on payment of the piescribed fee, issue a licence authorising theapplicant to carry on such category ofinsurance business in respect ofsuch class ofinsurance poilciesas may be specified in the licence.

(2 ) Sub jec t tosec t ion l l ,a l i cence issuedundersubsec t ion(1)sha l lau thor ise thecar ry ingonof insurance business -

(a) in the case of an appiicant incorporated or registered under the Companies Act, in orfrom Seychelles, or in or from a country ortrid. Seychelies;

(b) in the case ofan applicant organised underthe larvs ofa country outside Seychelles,in or from Seychelles.

(3) The Authority shall not grant an application under subsection (l) except where it issatisfied that -

(a) the applicant's objects are limited to insurancedirectly from it:

business and operations arising

the applicant has disclosed such inflormation requested by the Authority in relationto the proposed business and the persons rvho rvill, ,pon

"o.-encement of the

applicant's business, have any proprietary, financial or other interest in, or inconnection rvith, that applicant;

the applicant has the financial resources and organisatronal and nranagementcapacitics that are necessary to cary on the business;

requlre any pcrson refered to indocirnrents as it may require fbr

(b)

( c )

[14th . lanuary 2008] Strppiement to Officictl Gazette t a aL L :

(d) the appl icant, substant ier l sharcholders, and of l lcers of the proposccl insurer are f i tand proper persons to ensure tlie souncl and prr:dent ntanagell.ient of thc insurancebLrsiness;

(e) thc appl icant rv i l l . upon being l icensed, be able to comply rvi th, and fLr l l l l l a l lreclui rertren ts t i l tdcr ' , th i s l ict ;

(0 in tiie case of a ibreign con.lpany, it is registered as an overseas company under the 6np 46Contpanies Act and has a sat is l 'actory record of at least 3 1,ears experience inhancl l ing the category ancl c lass of insurance business in respect of rvhicir theapplicaticin ts ntade, in tire country underrvhose lai,r,s it is organised.

(4) In determining an appl icai ion underthis Part , theAuthori ty may take into account-

(a) any gLrideiiires or international standards relating io the regulation of insurancebusiness issr-reci b'v an intemational body;

(b) the provisions ofthis Act or guideiines issued by the Authority; and

(c) anv infbrmation obtained from a foreign regulator or enforcement agency.

11.( l ) J 'he Authori ty may, rvhen issuir tg a l icence under this Paf i , impose such condit ions, condit ionsrestrictions and limitations as it deems flt. ora licence

(2) The Authority may, by notice in u,riting to the insurer, add, Ce lete, vary or detennine anycondition, restriction or limitation in the licence and the licence shall be deemed to have been issuedrvith such addition. deletion, variation or detennination.

(3) Where an insurer fails to comply rvith a condition, restriction or linritation imposed undersr-rbsection ( 1), it contmits an offence punishable under section 1 19.

12.(1) A person licensed to carr)' on insurance business under this Part - lj:T:fir,

(a) shall not, rvithout the approval oftheAuthority, open a branch or agency or set up o. orlicence

acquire any subsidiary in any country outside Seychelles;

(b) shail display its licence, at ail times, at its principal place of business in Seychellesand in every branch or oflice that it may have.

(2) Where an insurer lails to comply rvith subsection (1), it commits an offence punishableundersect ion I 19.

13.(l) The Authority shall establish and mainiain a register containing such particulars and Registcrsdeiails of licensees and registered persons, and in such fiorm, manner and meclium as it thinksappropriate.

(2) A person may, on payment of a prescribed fee -

(a) inspect the register during nonral office hours and take copies of any entry;

(b) obtain i i copv certihed b1'' the Authority as correct of any entry in, or extract of, thereglster.

124 Supp lemenno Offic ial Gazette !4th January 20081

Maintenanceo ff inancia l lysoundcondi t ion

Solvencymargin

TechnicalreserVes

(3) A copy ofany entry in thc register or ofany extract ofthe register given undcr subsection(2) shall be received in any proceedings as primufocle evidence of the entry, or the extract, as the casenray be.

(4) 'fhe Authority may make such acldition, erasure or other alteration to the register as it

col ls i( lcrs ncce ssrry to cnsUrc i ts acctrracy.

(5) The Authority ntay post on its website, parts or extracts of the register updated from timeto t ime.

PART III - SOT,VENCY R.EQUIREMBNTS

14.(1) An insurer shal i rnaintain i ts business in a f inancial ly sound condit ion by general lyconducting its affairs so as to be in a position at all times to *

(a) meet its liabilities as they arise; and

(b) keep the solvency margin required under this Part.

(2) An insurer shall be deemed to contravene subsection (1) where it fails to meet anyrequirenient under this Act relating to -

(a) the solvency margin and the method of its valuation and calcuiation;

(b) the maintenance of any technical provisions and reserves; and

(c) the kinds and spread ofinvestment of assets.

(3) An offrcer of an insiirer who knorvs or reasonably suspects that the insurer does not meetthe requirement of subsection ( 1 ) shall forthrvith inform the Authority thereof in writing-

15.( 1) Subject to subsection (2), an insurer shall -

(a) at ali times maintain a solvency margin of such value as may be prescribed;

(b) furnish to the Authority a return on its solvency margin in such form, manner andmedium, and witli in such time after its financial year as may be prescribed.

(2) For the purposes of this Act, the solvency margin of an insurer shall be the excess of thevalue of its assets over the amount of its liabilities, that value and amorrnt being determined inaccordance with such method as is prescribed.

16.( 1) An insurer shall make adequate technical provisions in its accounts for its underrvritingliabilities in respect of its insurance policies, rvhether long term or general, as the case mav be,including liabilities for unexpired risks, outstanding and incurred claims, provisions for claimsincurred but not reported, and ccntingent liabilities for policy benefits rvliich have not becomeclaimable, computed in accordance with a method specified in solvency regulations.

(2) An insurer shall, at all times hold unencurnbered assets to the value of its technicalprovisions, aiter nraking adequate provisions for all its other liabilitics.

(3) 'l 'he

assets covering the teclinical provisions shall take account of the insurance businessand the classes or pal-ts of classcs of business can ied on b1- the insurer in such a way as to secure the

[14th january 2008] |ttpplement to Official Gazefte I . 1 )

safbiv ' y ielc land niarketabi l i tv of i ts investurents, rvhich the insurer shal l ensure, are cl iversi f leclandacle quale ly,spread in accorciancc ' , . i i th solr ,e ncy regLrlat ions.

(4) Tl ie icchnical provisiot ts of an insurcr, other than a capt. ivc i rrs l i rel or:L pi .glession;Ll re-i t . ts l t rer, shal l al ai i t i r r tes be coverecl bi 'eouivalenr ancl ntatchi i tg assets except wherc, r ,v i th t f reapproval of the Authori ty ' , art inst i t -cr holds non-matching assets to cover a sl lm not exceeding ananloLtnt specif iecl in soIvency reguIat ions.

(5) Solvency'regrt lat ions may'provide that, {br any specrf ie<l purpose, assets or l iabi l i t ies ofan1'specrf ied class or clescr ipt ion shal i be iei t our ofaccount or shal l be t iken into account onlv to aspcc i f i cd cx ic l l i .

i7.(l) Sr-rbiect to sr:bsection (2), an insurer shall, regardless of the category of its insurailgs Separarionbusitress, set up anci maintain for so long as it is undcr liabilitl,in respect clf an iiisLrrance poiicy o1. ortir'dsclaim relating to that iund, separate insurance funcls for its Seycheilois policies a'd fbr its non-Seychel lois ool ic ies.

(2) fhe Authority nay, having regard to the small number of insurance policies and theirrelative Value in any one of the insurance funds, allow the insurer to maintain onlv one insurance fundfor both the Seychel lois and the non-Seychel lois pol ic ies.

( j ) Ar r ins r r re r sha l l -

(a) maintain the solvency margin, make such technical provisions and establisli suchreserve or fund, invest assets and appiy the solvencv regulations in respect ofeachinsurance fund as if they weie separate businesses;

(b) pay into the corresponding insr.rrance fund all moneys received by it in respect ofpolicies to tvhich the insurance fund relates;

(c) cary to the insurance fund all income and gains arising frorn the investment of theassets of t l )at insurance fund.

(4) Except in a rvinding up, and subject to any applicable regr,rlations, an insurer shall applythe assets of an insuratrce funci only to meet such liabilitiei ind expenses as are properly attributable tothat insurance fund.

(5) An insurer shail, rvithin each insurance ftrnd establishecl under subsecticn (i), establishand maintain, in respect of eacir category of insurance business, such assets, reserves and designaiedfund and in such manner as are referred to in this Parl and under applicable solvency regulations.

18.(1) A iong term insurer shall keep within its corresponding insurance fund set up under pg5;"n.i",1section i 7, an appropriately designated iund in respect of eacli class of long temr insuranss gusinsss fundcarried on, into u&ich shall be paid -,

(a) all moneys received by the insurer in respect of policies of that class rvhich areissued by it or under rvhich it has underlaken liability;

(b) all income and gains arising fiom the investment of the assets of that designatedl i rnd.

(2) An insurer shal l on issuing, or undertaking l iabi l i ty uncler, a long term insurance pol icvdetermine the designated ftrncl to rvhich the policy relates and the polici,'shalifor the purposes of this

Supplentent to Official Gazette | 4th January 200lil

Act be deenred to be and shall continue to be includeci in that designated fund until the cietenninationis revoked by, or rvith the approval of, the Authority.

(3) Assets of a designated fr.rnd established under subsection ( l) shall be kept separate fromthe other assets ofan insurer and shal l not rnclude -

(a) an amollnt on account ofgoodwill;

(b) an expenditure relating to capital;

(c) any other asset as nray be excluded under any regulations.

(4) A long term insurer shall not -

(a) transfer or otherwise apply assets representing a designated fund established undersubsection (l) otherwise than in respect of claims and expenses relating to thatbusiness, except out ofany established surplus in that fund;

(b) transfer or othenvise apply assets representing any part of the designated fundmaintained under subsection (1), othenvise than in respect of claims and expensesrelating to that part ofthat business, except out ofanv established surplus in that partofthat fund;

(c) transfer anv surplus in any designated fund or part ofsuch fund to a shareholders'fund, except where all established deficits in any other designated fund have beenmet;

(d) make any transfer from any designated fund to shareholders' funds, except out ofanestablished surplus; or

(e) declare or distribute any dividend or bonus except where al1 established deficitson any designated fund or any part of such fund have been mei.

(5) Subject to subsection (4), where the actuary recommends after an actuarial investigationthat the estabiished surplus of a designated fund in respect of pa(icipating policies may be uuuilubl.for distribution, the insurer shall not transfer or othenvise apply assets repiesenting any paft ofthatsurplus without allocating to the policyholders at least 90 percent of that surplus or such other amountas theAuthori ty may approve.

:",1::l:" 19.(l) Ageneral insurershall-

fund(a) establish and maintain a statutory reserve fund of such an amount as may be

specifi ed under solvency regulations;

(b) not declare or distribute any dividend or bonus out of its profits fiom its insurancebusiness, except after any deficit existing in the statutory reserve fund at its balance sheet date, hasbeen nret.

(2) No distribution to shareholders or transfer to other reserves or shareholders' fund shall bemade from the statutory reserve fund except as rnay be provided under solvency regulations.

Prohibit- 20.(1) An insurer shall not, without the approval of the Autirority, given generally or in ai""'] 't .*'"* parlicular case, and on such conditions as the Authority may determine -asscts

126

| - l th January l f)USl Sttpplement to OlJicial Gcrzette

(a) mortgage, charge or othcru' ise encuntber i ts assets.

(b) direct ly 'or rndirect ly bcrow an.r ' asset;

(c) by nleans cf any sr:rety, give anv secr-rritf in relation to obligations between otlrerpersons except rvhere the securi t l , is pror, , ided under a guarantee pol ic l , rvhich theinsurer is authorised to issue Lrnder i ts l icence.

(2) An insurer shal l not invest in derivat ives otherthan _

(a) der ivat ives designated as an asset in respect oi a hnkecl long term poi icy;

(b) tbr the purpose of reducing investme nt risk or for eihcient portfolio management;o r

(c) in such manner as the insurer r,vill, or reasorrabll'expects to, have the asset at thesettlement date of the derivative instrument r,vhich matches its obligations underthat instrument and from lvhich it can discharge those obligations.

21,( I ) An insurer shall enter into reinsurance treaties in respect of risks insured or to be insured Examinatior,in the course of its insurance business in accordance rvith sound insurance business principles.

.o.lnrurun..(2) An insurer shall produce to the Ar"rthority for examination such particulars of its

t' 'ttt 't '

reinsurance treaties or copies of its treaties or other reinsurance contracts as the Authoritv mavi-eq uesl..

(3) Where rhe Authoriry finds that -

(a) the tenns ofthe reinsurance ireaties are unfavourable to the insurer;

(b) the reinsurance treaties are not technically appropriate to the portfolio of theinsurer; or

(c) the reinsurer or reinsurance brokeris not a fit and proper person to do business with,

the Authority may give such directions as it considers fit, including a direction requiring thetemination or moditlcation of the reinsurance treaties or requiring additional reinsurance cover orprohibiting the insurer from entering into a contract r.vith a parricular reinsurer or through a particularreinsurance broker.

(4) In issuing a direction under subsection (3 ), the Authority shall have regard to -

(a) the category and class ofinsurance business carried on by the insurer,

(b) the antount of premiums received by or due to be received by the insurer during itslast financial year in respeci ofeach class ofinsurance business carried on by it;

(c) the nature and value ofthe assets ofthe insurer; and

(d) the reinsurer rvith rvhom the reinsurance is undertaken.

(5) An insr,trer sliall submit to the Authority such returns in respect of its reinsurance treatiesinclLrding i ts facultat ive reinsurance as the Authori ty mav require.

1 2 7

i 2 8 Supplement to Official Gazette !4th January 20081

I lemedialmcasures

22.(1) Where the solvencl ' nrargin of an insurer is less than that require d to be maintained, orthe insurer is otherrvise in contravent ion of sect ion l5 or of the solvency regulat ions, the insurer shal lno t -

(a) assLlme any new risks of any kind, or underrvrite or renew any insurance policy;

(b) declare or distribute any bonus or dividend to its shareholders;

(c) in the case of an insurer organised as a tbreign company, rernit any money out ofSe.vchelles in the fbnn of profits.

(2) No insurer shall declare or distribute any bonus or dividend to its shareholders, orremit any profits out of Seychelles where the declaration or distribution, or the transfer of moneyout of Seychelles, as the case may be, results or is likely to result in reducing the solvency niarginto less than that required to be maintained:

Provided that an insurer may declare or distribute a bonus or dividend or remit a profit if the actuaryhas certified that in so doing the insurer shall remain in a financially sound condition in accordancewith section l4(l), taking due account of the proposed operations of the insurer in the l2 monthsfollowing the proposed declaration, distribution or transfer.

(3) Where the solvency margin of an insurer is less than that required to be maintained, theinsurer shall rnake good the deficiency lvithout delay.

(4) Where the Authority is informed by an officer as required under section 1 a(3) or wherethe Authority reasonably suspects that an insurer is failing to comply, or is likely to fail to comply,with section 14, the Authority may direct the insurer to furnish the Authority with -

(a) information relating to the nature and causes ofthe failure or to such matters as may,in the opinion of the Authority, lead to the likely failure;

(b) a report by the actuary of the insurer on its state of soivency or on such matters asmay be requested by the Authority;

(c) a plan acceptable to the Authority for restoring the insurer's business to a financiallysound condition.

(5) Where the Authority has received the information or the plan referred to in subsection(4), the Authority may, without prejudice to any of the other powers of the Authority under this Act -

(a) direct the insurer to adopt the plan or course ofaction proposed or such other courseof action acceptable to the Authority that will bring the insurer into compliancelvith, or prevents it from being in contravention of, section l4;

(b) authorise any modification of the course of action referred to in paragraph (a) whichthe Authoritl, deenrs appropriatc;

(c) rvhere it is reasonably necessary in the interests of the policyholders of the insurer,at any time and notrvithstanding any step already taken by the Authority inaccordance rvith paragraphs (a) and (b), take such mezlsures as are appropriateincluding, issuing a direction, appointing an administrator or conservator, revokingthe licence of the insurer or applying for the winding up of the insurer.

[14th January 2008] Supplement to OfJicial Gazette

(6) ln considering any decision under this section, the Authority may consult the auditor andactuary ofthe insurer.

(1) A Judge in Chambers may, on application by the Authorit;r and on being satisfied thatthere is reasonable ground to suspect that the insurer does not meet the required solvency nrargin, orotherwise fails to comply with section 14-

(a) make an order restraining an insurer fiom contravening tiris section or a direction ofthe Authority under this secti on,

(b) order compliance with a direction made by the Authority in enforcing theprovisions of this Part;

(c) make such other order as the Judge may think fit.

(8) An insurer shall be deemed to be unable to pay its debts where it fails for a continuousperiod of 3 months to meet the required solvency nrargin.

(9) Where an insurer contravenes subsection (2), any person who, being at the time of theresolution a director ofthe insurer, voted for or consented to a resolution -

(a) authorising the payment or distribution of a dividend or bonus;

(b) consenting to a remission ofprofits out of Seychelles,

shall be jointly and severally liable to restore to the insurer any amount so paid, distributed or remitted

and not otherwise recovered by the insurer.

23.( I ) The Minister may make solvency regulations for the purpose of this Par-t. LilijfJ^,

(2) Regulations made under subsection ( I ) may provide for-

(a) classes of assets and their exclusion from the calculation of the solvency margin;

(b) the holding and investment of assets in Seychelles;

(c) restrictions on and diversification of investments;

(d) the calculation oftechnical provisions and liabilities;

(e) the valuation ofassets;

(0 the establishment of designated funds and statutory reserves; and

(g) such other matters as are relevant to the prudential management of an insurancebusiness.

PART IV _ REGULATION OF BUSINESS OF INSURER

24.(l) An iqsurer shall, in respect of its insurance business, at all times - llifif' unodeposi l

(a) have and maintain such stated capital as may be prescribed; and

(b) make and maintain a deposit in such amolult, and with such custodian, as may beprescribed.

129

SupT; letitenr to O,fiicitt/ Guzefie I i 4tii janr"rary 2tiO8]

(2) An insure r sirall nrahe gooci fbrthrvith any p:irt _

(a) cifthe stated capital that is inipaired b.v iosses or oiher."vise;

(b) ofthe deposit rvhich on any balance sheet date is valued at lcss than the prescr ibeclam0Lrnt.

(3) A cie posit shall be part ol'tire asseis ofthe insi,rre r brit shall 1ot -

(a) be capable oi'being transf-emecl, assigned, or eitcurnbercti rvith a moftgage or otliercharge by the insurer;

(b) be avai lable {br the discharge of a i iabi l i ty of t i re insui 'er other than a l iabi l i ty inrespect ofa Seychei lois pol icy; or

(c) be liable to attachment in execution of a judgment except a judgnrent cbtaineci by apolicyholder of the insurer in respect of a debt due upon a Seychelles polic;, andrvhich debt the policyholder has been unable to recover in any other rvay.

Shares and 25.An insurer shall not, lvithout the approval of the Authority or otherrvise than in accordancedebentures rvith the conditions notified by the Authoriiy -

(a) issue or convert any shares which confer prefercntial rights to distributions ofcapital or income;

(b) coitvertany ofits shares ofaparticularclass into anotherclass:

(c) convert any of its shares ir-rto debentures;

(d) issue any debentures; or

(e) reduce its minimum capital requirement.

R-eg,istration 26. ( 1) Subject to subsection (2), an insurer shall not, except rvith the approval of the Authority,:::T:Tin issue, allot or register any of its shares in the name of a person other thari the intended beneficialffiil:":: shareiolcier.

(2) Siibsection (1) shall not apply to the issue, allotment or registration of the shares of ani nsurer -

(a) by operation of law, rvhether on the death, bankruptcy or insolvency of ashareholder ofthe insurer. or otherwise:

where it is necessary that the shares be so issued, allotted or registered in ortler tofacilitate delivery to the purchaser of the shares or to protect the rights of thebeneficiary in respect of those shares for a reasonably limited period oftime;

in the name of a person acting as a trustee or custodian or a recognised depositaryinstitr:tion rvhere that person, the insurcr or shareholder concerr-ied is able onrequest, to disclose to the Authority the nante cf the benet'icial shareholCer onrvhose behalfshares are hcld; or

to any other person fbr a purpose approved by the Authority.

1 3 0

(b)

(c)

( d )

[4th January 2008] Supplement to Official Gazette

(3) An insurerwho knowingly issues, allots orregisters its shares in breach of subsection( l ) commits an off-ence punishable under sect ion I 19.

27.(1) No person shall, rvithout the approval of the Authority, acquire or hold such nut.trbet of Linriration

131

shares in an insurer so as to make that person a significant shareholder in that insurer.

(2) Approval under subsection ( I ) shall not be granted rvhere *

(a) the applicant or the significant shareholder is not fit and proper;

(b) it r.vould be contrary to the interests of the policyholders or ofthe insurer'

(c) it would be contrary to the public interest.

(3) An approval under subsection ( i ) may be given -

(a) subject to the aggregate amount subscribed by the person concerned and theperson's associates in respect ofthe stated capital ofthe insurer not exceeding suchpercentage as may be determined by the Authority without further approval beingrequired under this section;

(b) subject to such other conditions as the Authority may deem fit.

(4) Where the Authority is of the opinion that the retention of a particular shareholding by aparticular significant shareholder is prejudicial to the insurer, the interests of the policyholders or theinsurance industry, it may, by notice in writing -

(a) require that shareholder to reduce, within a period specified therein hisshareholding to a percentage of the stated capital of the insurer below thepercentage that makes him a significant shareholder; and

(b) lirnit the voting rights that may be exercised by that shareholder to a percentage ofthe voting rights attached to the entire amount subscribed in respect of the statedcapital of the insurer below that qualifying the shareholder as a significantshareholder.

(5) A person who fails to comply with -

(a) subsect ion(1);

(b) a notice issued under subsection (4),

commits an offence punishable under section 119.

on control ofinsurcrs

28.(1) Nopersonshall- :.$ffi""(a) either personally or by proxy granted to another person cast a vote attached to; ::;11ffi""

(b) receive, or be entitled to receive, a dividend payable in respect ofl Act

(c) be allotted any share by rvay ofa bonus issue in respect of,

a share in an insurer acquired orheld in contravention ofsection 27.

(2) The validity ofa resolution passed by an insurer shall not be affected solely by reason ofa vote being cast contrary to subsection ( I ).

132 Stipplement to OlJicial Gctzette [14th January 2008]

I 'urn i shingr-. fin lormat ion!) ll

sharchol d i ng

N4anagementof an insurer

D,-rties ofCirectors

(3) A shareholder of an insurer or the Authority n-]av apply to the Court fbr an order ofrest i tut ion to the insurer of any uroney paid to a person by rvay of div idend or any share al lot ted inbreach ofsubsect ion ( I ) .

(4) Anl,person rvho fai ls to comply rvi th subsect ion ( l ) commits an of lence punishableuncler sect ion I 19.

29.(l) l 'he Authority ma)' recluire an insurer to furnish it in such fomr, manner and rnediumas it may' specifl '. r.r,ith particLrlars and information concenring -

(a) its shareholders;

(b) the nominee of a shareholder;

(c) any person accorciing to rvhose instructions and directions a shareholder normallyexercises his rights as such.

(2) Any person refened to in subsection ( I ) shali. upon a lvritten request from the insurer orthe Authority, fumish the insurer or the Authoritl,, as the case may be, with such particulars orinfbrmation as is required for the purpose of a recluest made under subsection ( I ).

(3) Where, rvithout a reasonable excuse, an insurer fails to comply with subsection (l) or aperson fails to comply rvith a request under subsection (2), the insurer or the person, as the case maybe, commits an offence punishable under section I 19.

30.No insurer shall be managed by any person other than -

(a) in the case of an insurer established '.rnder the laws of Seychelles, the personsappointed in accordance with the constitutive docriments under which the insurer isset uP;

(b) in the case of an insurer established as a foreign company, an authorised agent rvhois appointed by the parent insurer rvith the approval oftheAuthority;

(c) an insurance manager licensed under Part VIII.

31. ( 1) \Vithout limiting the duties of directors in managing the affairs of an insurer, the directorsshail -

(a) have regard to the interests of its stakeholders, including its policyholders;

(b) establish aclequate internal controls and adopt strategies, policies, processes andprocedures in accordance rvith principies of sound corporate governance and riskmanagernent;

(c) monitor compiiance r,vith the Act and directions of the Authority and rvith thecontrols, strategies, poiicies, processes and procedures referred to in paragraph (b);

(d) set up such committees as the1, deern necessary to discharge their responsibilitieseflectively;

(e) approve measures for the maintenance of the undertaking in a sound frnancialcondition in accorclance with section l4t

[4th January 2008] Sttpplentettt to Offcial Go:ettc

(f) establish and nraintain proccdures lbr--

( i ) idcnt i ly ' ing and resolving si tuat ions of, or potent iai s i tuat ions o1, conf l ict ofi nterest;

( i i ) restr ict ing the use of conf ident ial in lbrmation;

(ii i) the disclosLrre of re levant information to clients so as to allorv thenr to makeinfornrcd decisions;

(iv) clealing r,vith complaints lrom policyholders or members of the public ingeneral; and

(v) ensr:ring the sound and sustainable conduct of br.rsiness.

(2) The directors of an insurer shall detemine the clear responsibilities and reporting dutiesof the cliief executive of ficer and the se nior managers.

(3) Without prejudice to"any of their other fiduciary duties, the directors and other principalofficers ofan insurer shall -

(a) act honestly and in the best interests ofthe insurer and policyholders, and

(b) exercise care, diligence and skill in the discharge of their duties.

32.( 1 ) Subject to subsections (2) and (3), an officer of an insurer who - Avoiding conflict

(a) is a party to a contract or proposed contract u'ith the insurer:

(b) is an officer or a substantial shareholder of any entity that is a party to a contract orproposed contract rvith the insurer; or

(c) has a material interest in any person, who is a party to a contract or proposedcontract with the insurer,

shall, immediately after becoming aware ofthe contract or proposed contract, disclose in writing orcause to be entered in a record kept for that purpose by the insurer, the nature and extent ofthat interestin accordance rvith the other provisions ofthis section.

(2) Where the contracting parly referred to in subsection (l) is a director, the disclosurereqr"rired by subsection ( 1) shall be made, -

(a) at the meeting of directors at which the proposed contract is first considered;

(b) rvhere the director lvas not then interested in the proposed contract, at the firstmeeting after the director becomes so interested;

(c) rvhere the director becomes interested after the contract is made, at the first meetingafter the director becontes so interested; or

(d) rvhere a person lvho is interested in the contract later becomes a director, at the firstme eting after that person becomes a director.

(3) l 'he disclosure required by subsection ( l) shall be made, in the case of an officer otlterthan a director, to the secretary ofthe board ofclireciors -

l l 3

Suppiement to OlJicictl Gazelte I l4th January 2008]

{a) inrrnediatelv afier the oificer becomes aware that the proposed contract is to beconsidered or a contract has been considered at a me et ing of c l i rectors;

(b) rvliere the olficer becomes interested afier the contract is made, fbrthwith after theofflcer becorrres so interested, or

(c) rvhere a pcrson rvho is interested in the contract later becomes an ol'ficer,immediate ly alier the person becomes an olllcer.

(4) An of ltcer rvho knon'ingly fails to make a disclosr:re in breach of this section commits anoffence punishable under section I 1 9.

r{eq.uircrncnt 33.(1) Where section 32 applies to a director in respect of a contract, the director shall not beto a0starn present a1 any meeting of directors rvhile the contract is being considered at the meeting or votc on any

resolution to annrove the contract unless the contract is -

,;; an arrangement by rvay of security for money lent to, or obligations undertaken by,the director for the benefit ofthe insurer or a subsidiary ofthe insurer,

(b) a contract relating primarily to the director's remuneration as a director or anofficer, employee or agent of the insurer or a subsidrary of the insurer or an entitycontrolied by the insurer or an entity in which the insurer has a material investment;t r l

(c) a contract with an affli iate ofthe insurer.

(2) Any director of an insurer who knowingly contravenes subsection (i) commits.anoffence pLrnishabie under section I 19.

(3) The Cor.rrt before which a director is convicted of an offence under this section shall, inaddition to any penalty imposed under subsection (2), order that the director be disqualified fromholding ofllce as director of any insurer fbr a term not exceeding 5 years.

conseqLrence 34.( 1 ) Notrv ithstanding sections 3 2 and 3 3, and subj ect to subsection (2), a contract betr.veen ans of conf l ic t;i;";;;;;;"' insurer and one or lnore of its officers, or betrveen an insurer and another entity of rvhich an officer of

the insurer is a director or an officer, or betrveen an insurer and a person in rvhich or whom the officerhas a materiai intere st. shall not be void -

(a) by reason only ofthat relat ionship;or

(b) bV reason only that a director with an interest in the contract is present at or iscounted to determine the presence of a quorum at the meeting of directors or thecommittee of directors that authorised the contract.

(2) A contract referred to in subsection ( 1 ) shall not be void except where -

(a) the officer has failed to disclose his interest;

i 'r1; 40 (b) the conti'act was not approved by the directors, or specifically authorised by virtr"reof sections I 7 1 or I 72 ofthe Companies Act; or

(c) it rvas not in the interest ofthe insurer at the time it r,vas approved.

Ai'oidrnce or 35.Where an officer of an insurer fails to drsclclse an interest in a contract in accordance withcontract section 32, a Court may set aside the contract on such terms as the Court thinks fit.

Appointment 36.(l) No appointment of a principal officer b\, au insurer shalltake eff-ect without tlie prior

,li,.'']ill''0"' approval of the Authoritv.

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[14th Januar"v 2008] \trpplenent to Official Gazette

\2) An insurer shal l declare to theAuthori ty at the t ime of an appl icat ion fbr approval inaccordance with subsection ( l) that the persor-l is a f'rt and proper person to be appointed as a principalofl r cer.

(3) For the purposes of tli is section, in determining rvhether a pcrson is a fit ancl properperson regard shall be had to -

(a) the person's probity, conrpetencc, experience and soundness of jucigment tbrful f i l i ing the responsibi l i t ies of the relevant posi t ion;

(b) the diligence rvith u,hich the person is fuifil l ing or is likely to fulfil thoseresponsibi l i t ies;

(c) the person's educational and professional qualifications, and membership ofprofessional or other relevant bodies as applicable;

(d) the person's knowledge and understanding ofthe legal and professional obiigationsto be assumed or undertaken;

(e) any evidence that the person has committed any off'ence involving dishonesty or.iiolence or has contravened any law designed to protect members of the publicarising from dishonesty, incompetence, malpractice or conduct of discharged orundischarged bankrupts or otherwise insolvent persons.

37.(1) The Authority shall be deemed to have approved the appointment of a person under F-itandsection 36 rvhere it has not objected to such appointment within 15 days after having been notified in proper person

writing of the proposed appointment.

(2) Where thc Authority considers that a person referred to in section 36 is not fit and

proper, it shall inform the insurer and the person concerned of its intention to object to such

appointment, and the appointnient shall be of no eff'ect unless the objection is withdrau'n.

(3) The Authority shall not confimr its objection under subsection (2) r'vithout giving the

insurer and the person concerned an opportunity to make representations on the'objection.

(4) The Authority may, after taking into consideration the representations made under

subsection (3), rvithdraw its objection to the appointment.

38.The board of directors of an insurer may set up such sub-committees as it may deem Board.sub-

appropriate in order to ensure that the business of the insurer is conducted according to principles of commrtlees

sound corporate governance.

39.An insurer shall maintain adequate intemal control systems commensurate with the nature and Intemal

volume of its activities and the types of risks to rvhich it is exposed, regarding - fl,::j,

(a) operations and internal procedures;

(b) the organisation of accounting and information processing systems;

(c) risk and resr.rlt measurement systems;

(d) documentation and information systems; and

(e) transact ionsmonitor ingsystems.

PART V _ AUDITORS, ACTUARIES, ACCOUNTS AND RETURNS

40.(1) Subject to this section and any relevant regulations, an ir.rsurer shall appoint and have at AflJjirflent

all t imes - and actuarr

Supplement to Ofiicial Gazette l l4th January 20081

(a) an auditor; and

(b) an actuarl'.

(2) Subject to subsect ion (5), an appointment made under subsect ion ( l ) shal l not L 'eeffective unless it is approved by the Authority.

(3) In making an appointment under subsection ( i ), an insurer shall consider and state in theresolution nraking the appointment rvhether the auditor or the actuary, as the case may be -

(a) holds the required qual i f icat ions and competence, has proven experience andadequate resources to perform the appointee's iirnctions;

(b) is independent of the insurer in that the appointee, or in the case of a firm any of itspartners, has no relationship with, or interest in, the insurer, any of its group ofcotnpanies, nor has anv connection with any director or substantial sirareholder ofthe insurer that could reasonably be perceived as materialiy affecting the exerciseby the appointee of an independent mind and judgment in the performance of theappointee's duties;

(c) is fit and proper in accordance with section 36 (3).

(4) An application for approval under subsection (2) shall be made in rvriting and shall beaccompanied by a certified copy of the resolution made under subsection (3) or any information anddocument as the Authority may reasonably require.

(5) Except where an appointment is expressly objected to by theAuthority within I 5 days ofthe submission of an application under subsection (4), the appointment shall be deemed to have beenapproved and shal1 become effective from the date of appointment.

(6) ln determining an application under subsection (4), the Authority may take intoconsideration -

(a) any report from the professional organisation of which the proposed appointee is amember, or from a supervisory body;

(b) any matter or information relevant to determine whether the proposed appointee is afit and proper person.

Noriceof 41.An insurer shail give the Authority written notice of the termination of appointment orre signation resignation of its auditor or actuary rvithin 1 5 days ofthe tennination or resignation.endtermination

42. (1) Subject to subsection (2), the Authority may require an insurer to terminate theTermination appointment of an auditor or actuary of the insurer lvhere it has reason to believe that the person orinooin,n,.n,, firm concerned is not fit and proper to hold the office concerned in accordance rvitli section 36 (3).bjjAuthorirl

(2) The Authority shall not make a request under subsection ( 1 ) without -

(a) giving prior notice of its intention to act in accordance with subsection (1) and thereasons for so doing; and

(b) giving the insurer and the person or flrm concerned an opportunity to makereprescntat i ons.

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[14th January 2008] Sttpplement to Of/icial Gazette

43.( 1) The auciitor or actlrary of an insurer shall- lJjilljjli(a) rvhere a report or rctunl is made to the insurer or to any public authority, provide a

to repon

copy thereof to the Authority I

(b) lvhere, but lbr a termination o1'appointment or resignation, there tvould havebeen reason to submit to the insurer a repofi containing unfavourable or criticalremarks, subnrit such a repofi or draft report to the Authority.

(2) A person being the ar,rditor or the actuary of an insurer shall forthrvith inform and as soonas practicable submit a report to the Authority rvhenever in the perfoiltance of the person's functionsthe person becor.ires aware or has re ason to believe that -

(a) the insurer's financial soundness is seriously prejudiced, or the insurer's abilityotherwise to comply with this Act and the regulations is seriously irnpaired;

(b) there is any material change in the business of the insurer which may jeopardise itsability to continue as a going concern;

(c) there has been a breach of any of the provisions of this Act or any other enactmentrelating to the keeping ofaccounting records or to audit;

(d) directions given by the Authority have not been properly complied with;

(e) losses have been incurred which reduce the amount paid as stated capital orassigned capital, as the case may be, by 50 percent or more;

(l) the insurer is unable or is not likely to meet the margin of solvency.

(3) A reference in this section to an auditor or actuary canying out an audit or assessment

includes an auditor or actuary who was engaged to carry out such an audit or assessment or who was in

the course of carrying out such an audit or assessment but resigned before carrying out or completing

the audit or assessment or rvhose contract to carry out or complete the audit or assessment was

otherwise terminated.

(4) In respect of any act performed or communication made in good faith, whether

spontaneously or in response to a request by the Authority, pursuant to the discharge of duties under

this section -

(a) the auditor or the actuary shail not be deemed to be in contravention of anyenactment or in breach of

(, any code of professional conduct to rvhich he is subject whether inSeychelles or abroad;

(i, any contractual provision binding him to any confidentiality whether tothe insurer or to any other party;

.(b) no civil, criminal or disciplinary proceedings shall l ie against the auditor or thc

actuary.

11. ( I ) The Authority may impose all or any of the follorving duties on an auditor - il1iJi:?i|,"

(a) to submit such additional information in relation to the auditor's audit as the tuo"o'

Authority considers r-lecessary ;

131

Supplement to Official Gazette [4th january 2008]

(b) to enlarge or extend the scope ofthe auditor's audit ofthe business and affairs oftheinsurer;

(c) to carry out any other exatnination;

(d) to submit a report on any ofthe matters referred to in paragraphs (b) and (c),

and the insurer shaliremunerate the auditor in respect of the discharge by the auditor of all or any ofthese dut ies.

Actuarial 45.( 1) An insurer shall cause an assessment of its financial condition to be made annuallv bv theassessntent lnsurer s aciuary.

(2) An assessment to which subsection ( 1 ) relates shall include -

(a) in the case ofa long term insurer-

O a valuation of the liabilities of the insurer attributable to the insurer's longterm insurance business;

(ii) the establishment of any deficit on the insurance fund and the designatedfund referred to under Part III;

(iii) a determination of any excess over those liabilities of the assets representingthe fund or funds maintained by the insurer in respect of that business and,where any rights of any long term insurance policy holders to participate inprofits relate to particular parts of such a fund, a determination of any excess r

ofassets over liabilities in respect ofeach ofthose parts;

(iv) the establishment of any excess on the insurance funds rvhich may, subject toany restriction, be transferred to shareholders'funds and be available fordistribution;

(b) in the case of a general insurer, rvhere required by the Authority, a valuation of itsunderwriting liabilities, and in respect of liabilities incurred but not reported, claimsand other technical liabilities, including any deficiency in reserving for suchliabilities in accordance with the solvency regulations.

(3) Where an assessment into an insurer's financial position is made, the insurer shall -

(a) fumish to the Authority u lopy

ofthe report ofthe insurer's actuary; and

(b) prepare and fumish to theAuthority a statement ofthe insurer's business in the formto be determined by the Authority, within such time limit as may be prescribed.

(4) The report referred to in subsection (3) shall include -

(a) a statement ofthe valuation basis used,

(b) a statement showing the extent to which account has been taken of the nature andterm ofthe assets available to meet the liabilities valued;

(c) the actuary's opinion on the value ofthe assets mentioned in paragraph (b);

(d) a list ofthe assets so mentioned and their values, giving any equities held separately;

r 3 8

[ 4th January 2008] Supplenient to Official Gozette

(c) a cousol idated revenue accollnt for the period covered by the report;

( f . ) a statement on whether the pncing of the insurance pol ic ies is prudent ial ly sound;and

(g) such other mattcrs as may be re quired under solvency regr"rlations.

(5) The actuary who makes the valuation shall certify whether in the actuary's opinion thevalue plziced upon the aggregate l iabi l i t ies relat ing to a fund in respect of pol ic ies by the valuat ion isnot less than the valuc rvhich rvould have been placed upon those aggregate l iabi l i t ies i f i t had beencalcr-r lated on the minimunr basis prescr ibed.

46.( I ) An insurer carrying on nlore than one category of insurance business shall keep separate Separation of

accounts of all receipts and payrnents in respect of each category of insurance business. sccor-rrrts

(2) The Authority may, by notice in writing, require an insurer carying on more than oneclass ofinsurance business to keep separate accounts ofall receipts and payrnents in respect ofa partofany such class ofbusiness.

(3) Where a single amount received or paid, whether in respect of premiums, investntentincome, claims, commission, reinsurance costs, administration costs, taxes or otherlvise is received orpa,id in respect of more than one class of insurance business, and the antount is not othenviseapportionable betrveen the different classes, the insurer shall, with the authorisation of the Authorityfor the purpose cf this subsection, apportion the amount in an equitable manner between the classes ofinsi-rrance business in respect ofrvhich it is received orpaid.

(4) tthere a long rerm insurer manages assets in linked long tenn insurance business, thatinsurer shall keep separate accounts and records for each portfolio.

(5) Nothing in this section shall affect the establishment and maintenance of an insurancefurrd under section lJ or adesignated fund under section i 8.

47.( 1 ) An insurer shall, at the expiration of each financial year, prepare with reference to that Accounts, balance\ /ctr- sheet and other' rttu'ns

(a) a balance sheet;

(b) a profit and loss account or a revenue account, or both, as may be applicable; and

(c) in respect of each category of insurance business, or part thereof, for which theinsurer is required by section 46 to keep a separate acsount of receipts andpayments, a revenue account.

(2) An insurer shall fumish to the Authority such further retums or abstracts, or amended orsubstituted returns or abstracts, as may be required by the Ar-rihority.

(3) Subject to Part IIi, every reserve or provision shall be calculated in accordance withintcrnationally approved rnethods, and the methods adopted for the purpose shall be disclosed to theAuthority'. incluciing any change in the methods.

(41 All amor.tnts rvirich are requirid to be shown in any account or balance sheet shall beshorvn in Seychelles cllrrency to the nearest rupee or in such other currency as may be approved by theAuthori ty.

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1 4 0 Supplement to O/ficial Gctzette [14th January 2008]

Audi t andaud i tor 'scerti ficate

Submissionandpubl icat ionof retums

Examinat ionof lc',urns

(5) An insurer that is a fbreign company and is required by the law of the country where it isestablished to prepare and lurnish to a public authority any documents, shall, within 3 months ofhaving done so, furnish to the Authority certified copies of every abstract, statentent, account andreturn fumishecito that public authority.

(6) No insurer shall change its llnancial year without the approval of the Authority.

(1) The Authority may specify such additional requirements in respect of the auditedfinancial statements of protected cell companies as it ntay deem appropriate.

18.(l) The accounts of an insurer shall be audited annually by its auditor appointed unclersection 40.

(2) The auditor shall, in a ceftificate relating to the accounts and statements in respect of afinancial vear ofan insurer, state rvhether-

(a) the accounts and statements to rvhich it relates appear to him to be in accordancewith the requirements of this Act, regulations and guidelines and give particulars ofany matters that do not appear to him to be in accordance with those requirements;

(b) amounts required by section 46(3) to be apportioned have been equitablyapportioned and, where they have not been so apportioned, give particulars of thefailure;

(c) every reserve has been calculated in accordance with section 47(3) and, where theyhave not been so calculated, give particulars ofthe failure.

49.(1) A copy ofevery account, baiance sheet, certificate, report, retum or statement requiredto be prepared under section 45,46 and 48 shall be signed by two directors and, in the case of a foreigncompany, the managing agent ofthe insurer, and bv the auditor who made the audit or the actuary whomade the valuation as the case may be and shall be submitted to the Authority within 3 months afterthe end ofthe period to u'hich they relate.

(2) An insurer shall f umish forthwith to the Authority a cerrified copy of every report onits affairs made to its shareholders or policyholders.

(3) Astatement orreturn otherthan a balance sheet, profit and loss account, revenue accountor actuarial report shall, in the case of a foreign company, be signed by the authorised agent unless theAuthority requires it also to be signed by the auditor or the actuary ofthe insurer.

(4) Notrvithstanding any written lal, a foreign company incorporated under theCompanies Act or otherwise licensed under this Act carrying on non-domestic insurance businessshall submit such fiirancial statements and retums as required in this Act only to the Authority.

50.( 1) The Authority may, by notice in writing, require any registered insurer to furnish it withinformation about any matter related to any business canied on by the insurer in Seychelles orelsewhere if in the opinion of the Authority it reqr-rires that information for the discharge of itsfunctions under this Act.

(2) Where it appears to the Authority that any return or report fumished to it under this Part isinaccurate or incomplete in any respect, the Authority may -

(a) require furlher infbrmation, rvhich shall be certified if it so directs, from the insureror from such auditor, actuary or other person as it may consider nece ssary;

[4th JanLrary 2008] Supplement to Ot'/icicrl Gccete t41

( 3 )

(b) rcqLt irc the i r lsurcr to subnri t any clocunrent fbr examinat ion by thc Authori t t , at i tsregistercd oi f lce or i ts pr incipal place of bLrsiness in Seyche l les, or to suppiy anystatement,

(c) exanrine anv pr incipal of i lcer of ' the insurer in re lat ion to the rerum or repori .

A t t - r p c r s o r t * l r o , i r r r r r l r i l , i r r g A r . : l r l r n o r r c n ( ) r t t r n c l u r s u b s e e t i t , r r ( l ) -

(a) makcs a statcntent rvhich he knor.vs to be false in a rnaterial parlicular; or

(b) recklessly niakes a statemcnt which is f-alse in a niaterial parlicular, comrnits anoff-cnce punishable undcr se ction I i 9.

In addition to the requirenrents of thc Companic-s Act, an insurer shall, for the purposeskeep in relation to its business activiries, a fuil ancl trLre lvritten recorcl. rvhether'or othern'ise, ofevery transaction it ntakes.

s 1 . ( l )of tiris Act,electronical l l

(2 )

Keeping ofrccortls andfegisters

Clap. 40For the purposes ofsubsection ( I ), such recorcls shall include -

(a) registers of all policies classiflecl in accordance with the class andthe category ofinsurance business;

a register of claims rcporle tl;

a reglster ol lnsurance agents and of insurance sub-agents authorised to act onbehalfoftlie insurer; and

(d) any other record that may be specified by the Authority.

(3) Every record under subsection ( I ) shall be kept for a period of at least 7 years after thecompletion ofthe transaction to u,hich it relates.

(4) Pursuant to subsection ( 1), a foreign company shall maintain such records in relation toits insurance business carried on in or from rvithin Seychellis at its registered office in Seychelles.

(5) Regulations may provide fbr the manner in which books, records and registers shall bekept and the entries that shall be made.

PART VI - TRANSFER AND AJ\{ALGANIATION

52.( I ) The rvhole or part of the insurance business of a registered insurer may be transferred fs Approvat requiredanother insurer registered in respect of the class or classes of business to be traniferred onlv if the fo.tp'rsferan<ltransfer is effected by a scheme under this section. " amargamatron

(2) Any rcgistered insurer shall, by virtue of this section, have the power to make such atransf-er by a scheme under this section, and the directors shall have the authority on behalf of theinsttrer to arrange for and do all things necessary to give effect to suclt a transfer; and this subsectionshall apply notrvithstanding the absence of that power or aurhority uncler the constitution ofthe insureror any lirnitation imposed by its constitution on its porvers on the authority of irs directors.

(3) A scheme undcr this section may ptovide fbr the business in question to be transf-crred toa body not registered as an insurer r-rncler this Act in respect of the relevant class of br-rsiness (inclr-rdinq

(b)

(c)

Supplernent to Official Gazette [14th January 2008]

a body not yet in existence), if the scheme is so framed as to operate only in the event of the body

becoming so registered.

(4) A scheme under this section for the transf-er of any insurance business may extend to the

transf'er with it of any other business, not being insurance business, where the other business is carried

on by the insurer as ancillary to the insurance business transferred.

(5) A scheme under this section may include provision for matters incidental to the transfer

thereby eff-ected, and provision fbr giving effect to that transfer, and in particular-

(a) for any property, rights or liabilities ofthe transferor (including assets cornprised in

an insurance fund) to vest, by virtue of the scheme and without further or other

assurance, in the transf'eree, and

(b) for the registration by the transferee of policies transferred, for the amounts to beincluded in respect of those policies in the transferee's insurance fund and for othermatters arising under this Act out ofthe transfer.

(6) A scheme under this section shall be of no effect unless confirmed by the Authority, but

may be prepared and submitted for confirmation to the Authority by any of the insurers concemed;

and if so confirmed, the scheme shall have effect according to its tenor notwithstanding an1'thing in

the preceding sections of this Act and be binding on any person thereby affected.

confirmarion 53.(l) Before an application is made to the Authority for the confirmation of a scheme underofschemes Sect iOn 52-

(a) a copy of the scheme shall be lodged with the Authority together with copies of theactuarial and otherreports, if any, upon which the scheme is founded;

(b) not earlier than one month after the copy is so lodged, notice of the intention to

make the application (containing such particulars as are prescribed) shall bepublished in the Official Gazette and in not less than one daily newspaper approvedby theAuthority; and

(c) for a period of l5 days after the publication of the notice a copy of the scheme shallbe kept at each office ofevery insurer concerned in or from which the insurer carrieson insurance business under this Act, and shall be open to inspection by allmembers and policy owners of such insurer u,ho are affected by the scheme.

' (2) The Authority may cause a report on the scheme to be made by a quaiified actuary

independent of the parties to the scheme and, if it does so, shall cause a copy of the report to be sent toeach ofthe insurers concemed.

(3) Copies of the scheme and any such report as is mentioned in subsection ( 1) (a) or (2), or

summaries approved by the Authority of the scheme and any such report shall, except in so far as the

Authority upon application made in that behalf otherwise directs, be transmitted by the insurers

concerned, at least 15 days before application is made for confirmation of the scheme to every policy

owner affected by the schente.

(4) An application to the Authority rvith respect to any matter connected rvith the schememay, ar any time befbre confirmation by the Authority, be madc by any person'"vho in the opinion of

theAuthority is likely to be afibcted by the scheme.

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[14th January 2008] Sttpplernent to OJficial Guzette

(5) The Authority may conf-irm the scherne rvithout modification or sttblect to

modifiiations agreed to by the insurers concertled, or ll lay refirse to confirm the scheme'

(6) The insurers concenred shall be jointly and severally liable to reimbttrse the Authority

uny .*p.nr.s incurred by it under this section in connection rvith any scheme or proposed sciteme and

a scheme shall inclucie piovision as to how that liability is, as between the insurers, to be borne'

54.(l) Where by a scheme under section 52 the insurance business of an insurer is l)ocumentstobc

transferred to another, the transferee shall, rvithin one month after the scheme takes effect' loclge with i'j:ilH schemc is

the Authority -

(a) a statement of the assets and liabilities of each insurer concerned as at the time

immediately before the transfer; signed on behalf of tlte insurer and, in tite case of

the transferor, indicating whetherlhe ffansfer is of the whole of the transferor's

business and, if not, the extent to which transferor's assets and liabilities relate to the

business transferred;

(b) a copy ofthe scheme as confirmed by theAuthority and a certified gopy ofthe letter

ofthe Authority confirming the scheme;

(c) copies of any actuarial or other ieports upon_which the scheme was founded being

reports made since a copy ofthe siheme was lodged under section 53(1); and

(d) a statutory declaration made by the chairman of the board of directors of the

transferee, or by its principal offlcer in Seychelles, fully setting forth every

payment made or to be made to any person on account of the transfer, and stating

that, to the best of his belief, no other payment beyond those so set forth has been, or

is to be, made on account thereof by or rvith the knorvledge of any insurer

concemed'

(2) ln subsection (1) (d), references to the making of a payment include references to the

transfer ofproperty or rights ofany description'

(3) On the confrrmation of a scheme under section 52, each ofthe insurers concerned, ifthey

ur..o.punies, shall fi le a copy ofthe scheme with the Registrar of Companies'

(4) This section shall not apply to the transfer of any insurance business of a foreign

.o-puny tt,ut is an insurer except in so'faias the transfer relates to insurance business carried on in or

from within SeYchelles'

55.The Authority may apply to the Court for directions in relation to any particular matter arising Application to cou

under a transfer or amalgutnuiion underthis Part' for directions

PART VII _ WINDING UP

Sub Part A - General Provisions

56.(1) Subject to this Part, the Companies Act shall apply to the rvinding up of an insurer' 3:1"'':fj'Hil'""

(2) Where an insurer is a subsidiary of a body corporate lvhich is not an insurer, and the body t"o *u

corporate is wound uP -

(a) the subsidiary shall not be wound up exce pt on the basis of a separate application for

winding up; and

144 Supple ntent to Olliciul Guzette I i 4th January 2008]

(b) thc provisions o1' this Part shal l apply in relat ion to ihe subsidiary as to any otherinsurer.

c .n r i r rL rar ion 57 . ( I ) A I iqu ida tor rv l io is inchargeof I iqu ida t ionproceec l ings in respec to f -an insurersha l l , sc rol'bLtsi'css ihr as it nrav be possible anci sr"rb.iect to the clirections of the Authority or thc urclcr of ihe Court, carryb) l iquidntor on thc insurancc business of the insurer clur ing thc l iquiclat ion procccci ings, but shal l not ef fect any

new c(r , i , r : lcts of insurancc inclucl ing rerrelvals of existrng pol ic ics ofgeneral insLrrance.

(2) A l iquidator uncler subsect ion ( I ) nray, in accordance rvi th Part Vl and subject to suchdirect ions as thc Aut l ior i tv nlv issue. transf 'er the asscts and lrabi i r t ies of thc insurer to anotherinsurer.

Proof ofc la ims

(3) The liquiclator nray, for ihe plrrpose of a transfcr uncler subsection (2), apply to the Cor-rfifbr an order to recirice -

(a) the amountof l iabi i i t ies underthe pol ic ies ofthe insurer; or

(b) the amount ofits other liabilities,

and the Court may so order to the extent necessary taking into account thc value of its availabie assetssubject to such condition as it considers fit.

(4) Where the liquidator is satisfied that the interests of thc existing policyholders andcreditors in respect of iiabilities of the insr-rrer attributable to its business require tl-re appointn-rent of aspecial manager ofthe business, the liquidator may apply to the Court, and the Court n-ray thereuponappclint a special manager of that business to act during such time as the Coi.rrt mav direct, with suchpowers, as may be entrusted to the specral manager by tlie Court.

(5) The Court may require the special manager to give such security as it considersnecessary.

(6) The Court may make such order as it considers appropriate with rcgard to the payment ofremuneration to the special manager.

58.Where it appears to the liquidator in charge of liquidation proceedings in respect of an insurerthat by reason of the insufficiency of its documents or any other circumstances, hardship would becaused if strict proof of debt rvere required, the liquidator may act on such evidence as he thinksappropriate and payment of a debt made by the liquidator in good t-aith to any person as being theperson entitled to it shall discharge the liquidator from ail l iabilities in respect ofthat debt.

valuationo{' 59.(1) Subject to any directions rvhich may be given by the Court, in the winding r-rp oian

i,'"'r.i;,1:',, insurer-

(a) the value of the assets of the insurer shall be ascerlained in such manner and uponsuch basis as rnay be determined by the liquidator in consultation rvith theAuthority;

(b) the liabilities of the insurer in respect of the current policies of long tenn insurancebusiness shall, as far as practicable, be calculated by such niethod and upon suchbasis as may be determined by an actuary appointed by tlieAuthority; and

(c) the liabilities of the insurer in respect of general insurance business shall bedetennined by tlic liquidator in consultation rvith the Authority.

[14th January 2008] Su pp I em ent t o Offi c i a I G aze tte

(2) The actuary, in deterni ining the basis ofvaluat ion uttder subsect ion ( I Xb), shal l take intoaccount -

(a) the purpose for rvhich the valuation is to be made;

(b) any guidei ines issr.red by theAuthori ty; and

(c) any dire ctions which the actuary may be given by the Court.

60.(1) Notwithstanding any other r.vritten larv, this section shall have eiTect with respect to the Application o1'lundsapplication of funds on the rvinding up of an insurer, and r,vhere any provision of this section is on wrnclrng up

inconsistent with the provision of any other written 1aw, the provjsion of this section shall, to the extentofthe inconsistency, prevail overthe otherprovision.

(2) Any debts or other liabilities arising out of contracts of insurance issued or undenvrittenby an insurer shall rank in priority before any other claim against the assets ofthe insurer.

(3) Subj ect to the other provisions ofthis section *

(a) the assets representing the insurance fund naintained by the insurer rvith respect topolicy liabilities in Seychelles or with respect to policy liabilities outsideSeychelles shali be applied only for meeting the liabilities ofthe fund to rvhich theyrelate;

(b) where the assets representing an insurance fund exceed the liabilities of that fund,the surplus assets may be applied to meet the liabilities of the other insurance fundwhich is def ic ient;and

(c) any deficiency subsisting after application ofthe assets ofthe insurance funds underparagraphs (a) and (b) shalibe met out of the other assets of the insurer, and anyunsatisfied liabilities relating to a policy shall have priority over any other claim orl iabi l i t ies.

(4) Where the insurer is a long term insurer -

(a) the assets representing the designated funds maintained by it under section 18 shallbe available only for meeting the liabilities ofthe insurer attributable to those funds;

(b) the other assets ofthe insurer shall be available only formeeting the liabilities oftheinsurer attributable to its other insurance business; and

(c) any surplus asset remaining after application of paragraphs (a) and (b) shall beavailable for meeting any liabilities not attributable to any insurance policies.

Sub Part B - Voluntary Winding up

61.(I) Notwithstanding the Companies Act, no insurer shall be wound up voluntarily rvithout Voiuntary winding up

the prior ftritten authorisation of the Authority. cap' 40

(2) The Authority may authorise an insurer to rvind up rvhere the insurer is solvent andsubmits a declaration to the effect that arrangements satisfactory to the Autirority have been made bythe insurer to nreet all of its liabilities under the insurance policies entered into by it prior to ihewinding up.

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1 4 6 Supplentent to Ofricial (jazette I l4th January 2008]

Rights ofpol ic1 'holders andcred itors

Distr ibut ionof assets

sl ial l -(3) Whe rc an insl l rer has receive d t l ie authorisat ion of the Alr thor i ty Llnde r s l lbsect ion (2), i t

(a) i rnnteci iateiy cease [o do busincss, retaining only t ] rc powers to carry out theneccssarv busine ss fbr the pLltpose of cfl 'ectrng an orderly rvincling up;

(b) repay i ts pol icyholciers and cre di tors in accordance rvi th sect ion 60; and

(c) rv ind up al l operat ions undef iaken.

T i(4 \ I l l e r rs i l rc r s i ra l l -

(a) rrot later than 3 0 days lrom ihe receipt o fan authorisation under subsection (2 ), sendby registered post a noiice o1'vciluntary rvinding r-rp, firnrishing such informatiou asthe Authori tv may specify, to a1l pol icyholders, creditors and persons othenviseentitled to the lunds or property helC by the insurer as a ficlr,rciary;

(b) cause to be published a notice of the r,'oluntary winriing up in such manner as theAuthority may specify.

62 . (1 ) - l ' hear , r thor isa t ionundersec t ion6 l (2 ) tou , ind ' , rpan insurersha l lno tpre jud ice ther igh ts

of a policyholder or other creditor to payment in full of his claim nor the riglit of an olvner of funds orother property held by the insurer to the retunt thereof.

(2) All laivful clain.rs shall be paid pronpth' and all fr-rnds anci orher propertjv held by theinsurer shail be retumed tc their rightful owners rvithin sr.rch period as theAuthority may deternrine.

63.(1) Where, in the opinion of the Authority, the insurer has discharged all its obligations, itslicence shall be cancelled and the remainder of its assets shall be distributed antons its shareholders inproportion to their respective rights.

(2) No distribution shall be made before -

(a) all clainrs of policyhclders and other creditors have becn paid or, in the case cf adisputed clii im, before the insurer has tumed over to the Authority, or to any otherpersoi-r proposed by the insurer and approved by the Authority, sufflcient funds tomeet any iiability that may be judicially determined;

(b) any funds payable to a policyholder or other creditor vrho has not ciaimed themhave been tumed over to the Authority or to any other person proposed by theinsurer and approved by the Authority;

(c) any oiher funds and property helcl by the insurer that could not be returned to therightful owners in accordance rvith section 84 have been transferred to theAuthority, or to any other person proposed by the insurer and approved by theAuthority, together rvith the relevant inventories.

(3) Any funds or property not claimed rvithin a period of i 0 years ibllowing tlieir transf'ershall be presumed to be abandoned iunds or properll ' and sirall be dealt with in accordance ulithsection 84.

Insufllcicnt 64.Wrere the Authority finds that the assets of an insurer r,vhose voluntary rvinding up has beenrsscts authorised shail not be sufficient for tiie full discharge oIall its obligations or that the completion of

the volttntarl, rvinding up is r"rndLrly delayed, it may petition the Couft fbr a winding up of the insurerr-rnder seotion 65 anrl for the apnointnrent of a liaLridator.

[14th January 2008] Strpplement to Of.ficial Gazette

Sub Par t C- Wind ing uP bY the Cour t

65.(l) Without prejudice to the provisions of the Companies Act relating to r.vinding up of winclinguphl

.ornpuni.r, the Authorlty may make a petition to the Court for the rvinding up oI'an insttrer rvhere - |' i l]tu,

(a) it is satrsfied that the insurer is contravening section I 5;

(b) the licence ofthe insurer has been revoked;

(c) it is in the public interest to do so.

(2) Where an application to the Court for the winding up of an insttrer is presented by a

person other than the Authority, a copy of the application shall, at the same time, be served on the

Authority and the Authority shall be entitled to be heard on the petition.

(3) The Authority shall be a party to any proceedings under any rvritten law reiating to the

winding up of the affairs of an insurer, and the liqr"ridator in such a winding up shall provide the

Authority with such information as it may from time to time require about the affairs ofthe insrrer'

(4) In the petition by the Authority for the winding up of an insurer, a reference rvhich relates

to the inability of the insurer to pay its debts or to meet its obligations shall be construed as reiating

also to its inability to comply with section I 5.

(5) Where an instrer licensed under this Act is wound up, the debts of the insurer shall,

subject io section 63, be paid according to the laws of Seychelles with respect to privileges and

priorities of claims, subjeit to the retention of such sums as are reasonably required to cover the

claims arising under insurance policies.

66.( I ) Where an insurer is unable to pay its debts, the Court may, instead of making an order for Redrction of

windingup, order the reduction of the amount of the current policies of the insurer upoll such terms contract

and subject to such conditions as the Court considers appropriate.

(Z) For the purpose of a reduction under subsection ( 1), the value of the assets and liabilities

of the insurer and all claims in respect of policies issued by the insurer shall be ascertained in the

manner referred to in section I 5(2).

PART VIII - OTHER INSURANCE PROFBSSIONALS

67.( l ) Exceptundertheauthori tyofal icencetothateffect,nopersoninSeychel lesshal lactas U^censineof

orholdhimself ouias- iil:::H:[XX13lT;insulancc brokers

(a) an insurance manager;

(b) an insurance ageni; or

(c) an insurance broker.

(2) For the purposes of this section, a person shall be deemed to act as, or hold himself out as,

an insurance manager, insurance agent or insurance broker in Seychelles, rvhere that person -

(a) by lvay of business, as an insurance manager, ittsurance agent or insttrance broker,

occupies premises in Seychelles, or makes it knorvn by an advertisement or by an

inseriion in a directory or by means of letterheads that he ntay be contacted at a

particular address in Seychelies;

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1 4 8 Strppientent to O/ficittl Gazette l i4th January 20081

(b) invi tes a person, by issuir ig: in acivert isernent ( in any place or country r .vhatsoever)or otherr 'v ise. to do in clr i ionr rvi thin Seychel les anv act in re lat ion [o an insurancepol icy u'hcrehl 'he rvi l l act as an insurancc nranzlger, insurancc agcnt or insurarrcebrclher, as thc casc nray be; or

(c) conducts hinrse li 'or perlbnns any act fiom u'hich it may reasonably be inf-en-ed thathc intends or proposcs to cany crn or carr ies orr, bLrsincss as l rr insurance ntanager)instirance ii-qent or insurance broker, as the case rrav be, in or from rvithinS ey 'c h c l les .

( i ) An app l ie a t i t l t t lb r a i ie c r rcc lo i l cL rs a r r i r i s r r rancc n la l ra {e r . i l r surancc aucnt o r insuranc tbroker, as thc case may be, shall be made in such fonl, manner and nrediLrrr, and tre accompanied bysuch documents and infornration as the Authoritl 'nray'specif_v.

(4) Where the Authori ty is sat isf ied that an appl icat ion under subscct ion (3) ought to begranted, it shali, on payment of the prescribed fee, issue a licence authorising the applicant to carry onbusiness as an insurance nrAnager, insurance agent or insllrance broker, as the case may be.

(5) The Authoriiy shali not grant a licence under subsection (4) except where it is satisfied+ L ̂ +L l l d L -

(a) the applicant's objects are limited to the business stated in the application andoperations arising directly from it,

(b) the applicant has such stated capital as may be specifie d in regulations;

(c) the applicant is covered by a prof-essional indemnity insurance policl,acceptable tothe Authority and meeting such requirements as may be prescribed;

(d) the applicant nteets such requirements as may be prescribed;

(e) the applicant has disclosed such information as the Authority has requested inrelation to the proposed business, and to persons lvho rvill, upon commencement ofthe applicant's business, have any proprietary, financial or other interest in, or inconnection rvith, that applicant;

(0 the applicant has the financial resources, organisation and management capacitiesthat are necessary to carry on the business u'hich is the subject-matter of theapplication;

(g) the applicant, the substantial shareholders, controllers, and principal officers oftheapplicant where it is a bociy corporate are fit and proper persons to ensure the sound' and prudent management ofthe business;

(h) the applicant rvill, upon being licensed, be able to comply with and fulfil allrequirentents under this Act.

(6) ln considering an application underthis section, the Authority may iake into accollnt-

(a) any guidelines or standards relating to the regulation of insurance managers,insurance agents and insurance brokers, as the case may be, issued by anintemational body;

(b) the provisions olthis Act or directiorrs issue d by the Authority; and

(c) any information obtained fiom a foreign regulator cr enforce nrent agency.

l14th January 20081 Supplement to Oj/icial Gozette

(1) The Authori ty may, in grant ing a l icence under this sect ion, impose sr-rch condi i ions andrestr ict ions to the scope ofbusiness ofthe l icensee as i t de ents t- i t .

(8) Any person rvho -

(a) contr0\ 'cnc'S sLrbscct iorr ( l ) :

(b) fails to comply rvith any ofthe conditions attachecl to thc person's licence,

commits an oflence punisirable under scction I 19.

(9) Any person who for the purpose of an application fbr a licence under subsection (3 ) -

(a) makes a representation or statement which the person knows to be false in a materialpar l icular; or

(b) recklessly makes a statement which is false in a material particuiar,

commits an offence punishable under section I 19.

63. ( 1) An insurer shall maintain at its principal place of business and display in a conspicuous obligations of anplace to'which the public has access a list of all its insurance agents. and provide the Atrthority on i:',:',';il::'""""demand lvith a copy ofthe list. asenrs

(2) An insurer shall notify forthwith the Authority of any contravention of this Act or anydirection thereunder committed by its insurance agents of rvhich it has knorvledge.

(3) An insurer shall notify the Authority of any termination of appointment of an insurance

agent and the reason for the termination rvithin 14 days ofthe date of termination.

(4) Notwithstanding any obligation under a contract relating to confidentiality, no

disciosure made by an insurer, acting in good faith under subsections (2) and (3) shall give rise to any

criminal or civil action against the insurer.

69. (l) No licensee under this Part shall change its financial year without the approval of the Financial

Authority. ::',:'#,'ilf -'

(2) An insurance manager, insulance agent or insurance broker, as the case may be, ,hdl 'H:'!1['^

submit to the Authority not laier than 3 montlis after the expiry of each financial year and wltn ffiiiiii,ffil"referenceto thatyear- brokers

(a) its audited financial statements,

(b) any other statements or returns as the Authority may speci fy.

(3) The Authority may speciff the form in rvhich financial statements are to be prepared for

sr"rbmission under subsection (2).

(4) An insurance manager, insurance agent or insurance broker, as the case may be, shall-

(a) keep such records, and

. (b) furnish to the Authority such s'ratements and retums relating to its business it.t suchform and at such interval, as may be prescribed.

149

1 5 0 Supplement to Olficia/ Gazette [14th January 2008]

Separr tcacc()Lrnts fbrprcnt iunrsreccir cd

Obl igat ionsof instrrancebroker

Registrat ion o1InsuranceRepresentative

70.( l ) No insurance manager, insurance agent or insurance broker, as the case may be, shal lreceive, hold, or in any other manner deal rv i th, or shal l be al lowed by an insurer to receive, hold anddeal ivr th, premii lms payable under an insurancc l - :ol ic1,, other than a reinsl lmnce trerty enterecl into orto be entereci into rvith an insurer. otherr.ii isc than in accordance lvith this Act or directions issued underthis Act.

, -) An insurance lnanager, insurance agent or insurance broker shal l open and nraintain abank account for the keeping of premiums received under subsect ion (1) and such account shal l beseparate fiom any account lvhich the insurance maniger. insurance agent and insurance broker, as thecase may be, ma1'ope n and nrarintain lor the keeping of its orvn funds.

(3) Any insurance manager, insurance agent or insLrrance brokcr who receives payment ofpremium from a policyholder on behalf of an insurer, shall pay the premium, less any commission andother deductions to lvhich by written consent of the insurer he is entitied, to the insurer as agreed to inadvance by the insurcr.

71.( I ) No insurance broker shall provide services in relation to an insurance policy where to doso rvould result or be iikely to result in a conflict of interest between the broker and an insurer or apol icyholder

(2) An insurance broker shall disclose to a prospective poiicyholder any commission orother remuneration that the broker is likely to receive from an insurer in the event that the prospectivepolicyholder ente rs inio an insurance policy for rvhich the broker has provided sen'ices.

72.(1) No person shall act as an insurance representative for an insurer carrying on non-domestic insurance business unle ss that person is registered with theAuthcrity.

(2) The Authority shall keep and maintain a register of insurance representatives.

(3) No insurer shall appoint a person in Seychelles to act as an insurance representativeunless that person is registered as such rvith the Authority.

(4) An insurer shal1, before appointing a person to act as its insurance representative, applyto the Authority for the registration of that person as its insurance representative in such form, mannerand medium as may be specified by theAuthority.

(5) The application under subsection (3) shall be accompanied by -

(a) information or document establishing the fact that the representative is fit andproper and such other information or document as theAuthority may specify; and

(b) such fee as may be prescribed.

(6) Where the Authority considers that a person is not fit and proper to be an insurancerepresentat ive, i t may -

(a) reluse to register t l ie person as an insurance representat ive; or

(b) rvhere a person has already been appointed as an insurance reprcscntative, direct theinsurer to terminate the appointment and remove the name of the insurancerepresentativc from its regi ster of representatives.

(7) Where an insurer ternrinates the appointment of an insurance representative, it shall,rvithin I 4 days afier the date of the terminati on, noti f y the Authority.

f14th January 20081 Strpplentent to OlJicial Gazette

(8) Anl,person rvho contravenes sr:bsect icn (1), (3), (4) or (7) of this sect ion comnti ts an

ofl'ence pr-rnishable r"rnder section 1 19.

73.( l ) There shal l be prescr ibcd an annual fec to be paid in respcct o1' every insurauce ArrnLral r 'cc fbrreprese ntative. ,llliiill,,""

(2) ' fhe annual fee under subsect ion (1) shal l bc paid b.v the insurer or thr- insurance

representative on such date as niay be prescribed.

(3) 1'he registration of an insurance representative shall be cleenrecl to have iapsed where the

annual fee under sr-rbsection ( 1) remains unpaid one month aftcr the date on rvhich it became due.

(4) Where the registration of an iusuralrce reprcscntative lapscs under subsection (3), the

name of that person shall be removed from the register of insurance representativcs ntaintained by the

Ar"rthority.

(5) An insurer shall not allow a representative whose name has been removed fronl the

register to act for or on its behalf.

74.(1) An insurance representative shall- l":X,*.T::"'"t

(a) keep such records, and representati'e

(b) furnish to the Authority such statements and retums relating to the insurance

representative's business in such form and at such intervals, as may be prescribed.

(2) An insurance representative shall not colleci and keep premiums on behalf of an insurer.

75.( I ) No person shall act as an insurance sub-agent for an insurer or an insttrance agent unless Registration of sub-

that person is registered rvith the Authority to act as such for the insurer or the insurance agent. agents

(2) The Authority shall keep and maintain a register of insurance sub-agents.

(3) No insurer or insurance agent shali appoint a person in Seychelles to act as an insurance

sub-agent unless that person is registered as such rvith the Authority.

(4) An insurer or insurance agent shali, before appointing a person to act as its insurance

sub-agent, apply to the Autirority for the registration of that person as its insurance sub-agent in such

form, manner and medium as may be specified by tlie Authority.

(5) The application under subsection (3) shall be accompanied by-

(a) information or document establishing the fact that the sub-agent is fit and proper

ar-rd such other infomration or document as the Authority ntay specify; and

(b) such fee as may be prescribed.

(6) Where the Authority considers that a person is not fit and proper to be an insurance sub-

agent, i tmay-

(a) refuse to register the person as an insurance sub-agent; or

(b) rvhere a person has already been appointed as an insurance sub-agent, direct the

insurer or insurance agent to tenlinate the appointntent and retnove the name ofthe

insurance sub-agent fiom its register ofsub-agettts.

l 5 l

Strpplentent to Offc:ial Gazette [ 4th January 2008]

(7) Wherc an insurer or insurance agctt t tenninates the appointr lent of an i rsurance sub-agent, i t shal l rv i thin l4 days after t i re date of t i rc tcrminat ion, not i f y the ALrthori ty cf that lact.

(8) Any pcrson rvho contrrvencs a provision of this sect ioir commits an of- tence punishableundersect ion I I 9.

AnnLral iec 76. ( l ) l 'here shal l be prescr ibed an annual { te to be paid in rcspect of every insurance sub-for sub-agcnt 2o911.

(2) The annual f 'ec under subsect ion ( i ) shal l be paid by the insurer or insurancc- agent orinsurance sub-agent, on such date as may bc prescr ibed.

(3) The registration of an insurance sub-agent shall be deemed to liave lapsedr.vherethe annual f-ce under subsectior-r ( I ) remains unpaid one month after the date on rvhich it be came due.

(4) Where the registration of an insurance sub-agent lapses under subsection (3), the nameof that person shall be removed from the register of insurance sub-agents rnaintained by the Authority.

(5) An insurer or insurance gent shall not allorv a sub-agent whose name has been rernovedfrom the register to act for or on its behalf.

obt igat ions 77.(1) An insttrance sub-agent shal l -of sub-agcnts

(a) keep such records as may be specified; and

(b) furnish to the Authority such statements and returns relating to the sub-agent'sbusiness in such form and at such intervals as may be prescribed.

(2) A sub-agent shali not collect and keep premiums on behalf of an insurer or insuranceagent.

claims 78.(i) The Minister mav, by regulations, provide for the registration of claims professionalsprolessronars anci the conduct oftheir business.

(2) For the purpose of this Act, a reference to a claims professional shall be construed as areference to a person rvho for remuneration carries on the business of, or holds himself out as, losssurveyors or loss adjusters, or otherwise advises on, or inyestigates, the cause and circumstances of aloss and ascertains the quantum ofthe loss for the purpose ofprocessing a claim on a general insurancepolicy.

PART IX _ PROTECTION OF POLICYHOLDERS

cerrain T9.Aprovision of an agreement shall be void if it seeks to provide that-provis ions tcrbe void (a) an insurer is exempt from liability fbr the actions, omissions or representations of a

person acting on its behaif in relation to an insurance policy;

(b) the person lvho has entered into ti-re insurance policy declares or admits that a personrvho acted on behalf of the insurer in connection r,vith an offer of that person to doso, or with the negotiations preceding the entering into it, rvas in fact appointed toact on behalf ofthe first-mentioned person,

(c) the obligation of an insurer under an insurance policy is dependent upon thediscliarging ofan obligation ofanother person under a reinsurance treaty;

t52

[14th january 2008] Strpplenrent to Official Gazette

(d) the person who has entered into an insurance policy, or the lif 'c insr-rred or any

benef ic iary under an insurance pol icy waives a r ight to rvhich the pcrson is, by or

under this Act, ent i t led.

80.( l ) Where an insurance pol icy, otherthan a reinsurance treaty, is entercd into orvar ied, the Infbrmation

insurer or the insuraltce agent shall, not latcr than 30 days after the policy has been entered illts, "rr Policics

provide for the purpose of the policyholder rvritten in fbrmation in the fbnl of a sumnlary relating to at

least the follorving matters, nante ly -

(a) those of the representations n-rade by or on behaif of the policyholder to the insurer

which representations were regarded by the insurer as tlaterial to its assessment of

the r isks under the Pol icY;

(b) the premiums payable and the policy benefits to be provide d under the policy;

(c) the disclosure of f'ees and commissions on the policy;

(d) the events in respect of which the policy benefits are to be provided and the

circumstances, if any, in which those benefits are not to be provided.

(2) The summary referredto in subsection (i)-

(a) may be used in evidence where it is relevant to determine any matter relating to the

Pol icY;

(b) in the absence of evidence to the contrary, be deemed to be representative of the

matters rvhich are materiai to the assessment ofthe risks under the policy.

(3) An insurer or an insurance agent who knowingly provides a summary required to be

made under this section rvhich is false or misleading in any material particular commits an offence

punishable under section I I 9.

S1.( I ) Where a party to a contract in tenns of which money is loaned, goods are leased or credit Free choice

is granted requires, whethir as a condiiion thereof or otherwise, that an insurance policy or its policy of policv

benefits be made available and used for the purpose of protecting the interests of a creditor, the person

rvho is so required to make that policy or those policy benefits available shall have a free choice -

(a ) as to -

(i) entering into a new policy andmaking it avaiiable forthatpurpose, or

(i, making avaiiable an existing policy of the appropriate value for that purpose,

or

(ii r) util ising a combination of those options; and

(b) where a nerv policy is to be entered into ..

(i) as to the insnrer with rvhich the policy is entered into and as to the insurance

ageri t , i Iany;

(ii) as to rvhether or not the policy benefits concerned are to be provided in an event On-sitc

other than the death or disability ofthe life insr"tred; and inspr'ction

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t 54 Supplement to Official Gazette [14th January 2008]

Annua lstate lnent tocerta inpol ic ; holders

( i i i ) as to r ,vhether or not the value of the pol icy benef i ts to be providcd thereunder,when taken in the aggregate with t l ie value of the pol icy benef i ts provideduncier any other policy r,r,hich is also to be ntade available and used for thatpLlrposel shal l exceed the value of that debt or other obl igatron; and

(c) rvhere an exist ing pol icy is to be made avai lable, as to u'hether or not a var iat ion ofthe policy reqr-rired for that pulpose shall be such as to callse -

(i) policy benefits 1o be provided in an event other than the death or disability ofthe life insured; or

(ii) the value of the poiicy benefits to be provided thereunder, rvhen taken in theaggregate rvith the value of the policy benefits provided under any otherpoiicy rvhich is also to be made available and used for that purpose, shallexceed the valrre of t l rat debt or other obl igat ion.

(.2) The provisions of subsection ( 1) shall be deenred not to have been complied with unlessthe policyholder whose policy is to be made available has confinned in writing, before the policy isused for the purpose ofsecuring the debt or other obl igation, that the policyholder -

(a) was given prior rvritten notification of the policyholder's entitlement to thefreedonr ofchoice referred to in that subsection; and

(b) lreely and rvill ingly exercised that freedom ofchoice.

(3) Any policy benefits that may be provided under a policy referred to in subsection (l)shallaccrue and be paid to a creditor only to the value of the interests of the creditor in the subjectmalter of the policy, and any surplus shall accrue and be paid to the policyholder rvhose policy is usedfor the protection ofthe interests ofthe creditor concerned.

(4) Where the provisions of subsections (i) and (2) are not complied with, the securityprovided by the policy made available and used for the purpose shall be void and the policy benefitsshall be provided to the person rvho made it available.

(5) Ajudgment creditor, the trustee in bankruptcy or liquidator of a bankrupt or insolventpolicyholder who is entitied to a part of the realisable value of an insurance policy may, where he is inpossession of the poiicy, deiiver it to the insurer rvho is liable under the policy for the purpose of thepayment to that creditor or trustee ofthe sum to which he is entitled.

(6) Where a judgment creditor, the trustee in bankruptcy or liquidator referred to insubsection (5) is not in possession of the policy concerned, he rnay by notice inform the person inpossession of the policy of his rights and require that person to deliver the policy to the insurer lvhichis liable under the policy for the purpose of the payment to that creditor, the trustee in bankruptcy orliquidator ofthe sum to rvhich he is entitied.

(1) This section shall not apply to a loan granted to a policyholder by a long term insureragainst a security ofa long tenn insurance policy.

82.Where a policyholder has invested in a "with profit" life insurance product which entitles thepolicyholder to a bonus at the discretion of the insurer or in an investment linked policy, the insurershallprovide the policyholder with a report of the perfbrrnance of tlie investment in such products,regularly arrcl in any case not less than once every year.

[1 4th Januar;v 2008] itr 1 t1., ! e ni eni I c OL-fi c iu i G u:elie i 5 5

83 . ( l ) No t r v i t hs ta r rd inganv t i r i ng to l l r e con t i a r y i i r u , r - r ' i i l i i L i n i a * , , l hcALr tho r i t l 'ma r - d rec la re 3 [ ' r i ' J cs i l ab l c

particr,riar insurance bitsiness pr-actice to bc i iudeslrLblr fbr - ;: lJi:::

(a) a l l or a par t icu l : i r c iass of insr . i r : ince poi ic ie s ; c- i

(b) al l or a plrr t icul : i r catcgor) 'of pcrsons r. , 'ho reni ler scrvices in rr 'spect of insurancepo l ic ics .

(.2) \\/here tlie Autlioritl,is satisfied thal an insiirer or ii person renciei:ing sen'icr-s in rcspsctof insurance policics is cany ing on a business practice i^,'hich may beconrc the sr-rbject of a clcclara.tiortuncler this section, the Authorit)' mali by notice direct that insurer or persolt --

(a) to srrspcnd thlii piirlicLilar business przictice fbr sLrch period as the Authority deemsnecessary to enable the malter to be detenrrined;

(b) to take reinedial action to the satisfaction of the ALrthority to eiirninate or mitigatethe eff-ects of, or arising from, that business practice.

(3 ) An insurer or other persott lvho -

(a) carries on a practice declared undesirable under this section,

(b) fails to comply rvitli a dire ction given under subsection (l),

commits an oflence punishable under section I i 9.

84.(l) Irlotrvithstandrng anything in any agreement betrveen an insurer and a policy'holder, and Abandoncd

irrespective of the amount, lvhere a policl'holder's entitlement to receive money under an insurance tu''ot

policy has been left untouched and not claimed for 10 years or more, the insurer shall -

(a) send by registered post a notice to that eff-ect to the last knorvn address of thepolicyholder or the treneficiary under the policy;

(b) cause the notice to be published in the Official Gazette and in one daily nervspaper.

(2) Where a policyholder or the beneficiary under a policy does not respond to a notice givenunder subsection (1), the entitiement under the insurance policy shall be deemed to have beenabandoned and shail, tvithout further forniality, be transferred forthrvith by the insurer to the CuratorofVacant Estates to be dealt with by the Curator.

35.( I ) Witirout prejudice to any other lvritten laws, the Authority may issue general directions Protection of

on sound insurance principles and prictice polic} holder

(2) Without derogat ing f iorr the general i t l 'of subsect ion (1), the general c l i rect ions r trayprovide fbr-

(a) the disclosure of fees, cornmissions and other costs on insurance policies;

(b) advert isemcnts and canvassing in relat ion to insurance poi ic ies;

(c) inlbrmation to be provided beforc anci afier entcring into an lnsuraitce contract;

(d) anl,olher nraLte r-at1'ecting tlie concluct of insurauce trLrsiness.

1 5 6 Sttpplenent to Oflicial Ga:ette [4th January 2008]

n ssumptronol r isk bygcn cralinsurer

Prenr i umratc underlong temrpol icy'

86.( l ) No general insurer shal l assume any nsk in respect of such general insurance pol icy asmay be prescribcd except rvhere the premir"rm payable is received by the insurer in sLrch manner andrvi thin such t inre as ma)'be agreed.

(2) Where the prem ium payable under subsection ( I ) is received by a person on behalf of theinsurer, the receipt shall be deemed to be the receipt by the insurer for the purpose of that subsectionand the | :;uS of proving that the premium lr,as received by a person not autliorised to receive thepremium sha l l l i e on thc insurer .

(3) Where a person receives on behalf of an insurer, premium on an insurance policy ref'erredto in subsection (l), that person shall remit the amount to the insurer within such period as may beagreed.

(4) Forthe purposes ofthis sect ion, where-

(a) the premium is remitted through postal n-loney order or cheque sent by post, the dateof booking the money order or the date of posting the cheque shall be treated as thedate ofpayment ofthe premium ifthe cheque is honoured;

(b) the premium is paid on or before the commencement of the risk to the insuranceagent it shall be treated as equivalent to the payment of premium to the office of theprincipal insurer.

87.(l) A long term insurer shall not issue a long term insurance policy except where thepremium rate chargeable under that class of poiicy has been certified by its actuary as being inaccordance rvith sound insurance business and actuarial principles.

(2) A long term insurer shall provide the Authority with particulars of every new long terminsurance policy product together with the certificate from its actuary, the prospectus or other salesliterature and specimen policy relating to that product and any other supporting information as theAuthority may specify, at least 30 days before offering the product to the public.

(3) Where it appears to the Authority that a long term insurance product is not appropriate forany reason, the Authority may, before the expiry ofthe 30 days -

(a) prohibit the insurer from offering the policy to the public;

(b) require the insurer to make such changes to the product as the Authority may specifybefore it is ofTered to the public.

(4) The actuary shall not certify premium rates for a long term insurance policy productunless the actuary is satisfied that it is suitable and in accordance with sound insurance business andactuarial principles.

(5) The Authority may require tl-re actuary of a long tenn insurer to provide it with a report on -

(a) the suitability of the policy terms and premium rates for the time being chargeable bythe insurer for a long tenn insurance policy product; or

(b) on such other matter as the Authority may specify in its request.

(6) The Authority may after considering the report of the actuary take such measures as arereferred to in subsection (3).

[ 4th January 2008] Supplement to O.//icial Gozette

88.( I ) The Authori ty shal l establ ish and maintain in accordance with this sect ion, a Pol icy' Pol icv .Orvners'orvners' Protection Fund for the purposes of- ffi;,,,

(a) indernnifying and compensating in whole or in part or otherrvise assisting orprotecting policy owners and others rvho have been or may be prejudiced inconsequence of the inability of registered insurers to mect their liabilities under lif-epol ic ies and compulsory insurance pol ic ies issued by them;

(b) subject to sect ion 91( 1), compensat ing persons in respect of damage ar is ing out of cap. tr5the use of a motor vehicle on a road, whether or not such use is required to becovered by a policy of insurance in respect of third party risks r"rnder the MotorVehicles Insurance (Third Party Risks) Act.

(2) Subject to such exceptions or restrictions as may be prescribed, the Authority shall -

(a) ensurethatasum equalto-

(, the full amount of any liability of a registered insurer in liquidation or infinancial difficulties, in respect of a sum payable to any person entitled to thebenefit under the terms of any compulsory insurance policy, being a liabilityarising in respect of a liability of the policy owner which is subject tocompulsory insurance; and

(i, 9A% of the amount of any liability of a registered insurer in liquidation or infinancial difficulties towards a policy owner under the terms of any life policywhich was a Seychelles policy or an offshore policy and not being a contract ofreinsurance.

is paid to the person or policy owner as soon as reasonably practicable after thebeginning ofthe liquidation; and

(b) make arrangements so far as reasonably practicable for securing continuity ofinsurance for every policy owner of a registered insurer in liquidation or in financialdifllculties who is a policy owner in respect of a life policy which was a Seychellespolicy or an offshore policy and not being a contract ofreinsurance, and for thispurpose the Authority may take measures to secure or facilitate tire transfer of thelife business ofthe insurer, orpart ofthat business, to another registered insurer or tosecure the issue by another registered insurer to the policy owners of life policies insubstitution of their existing policies;

(c) ensure that a sum equal to such amount of compensation payable to a person eligibleunder subsection ( I )(a) or (b) as determined by the Authority is paid to the person assoon as reasonablv nracticable after the determination.

157

89. (l) For the purposes of financing the expenditure of the Policy Owners' Protectionlevy may be imposed from time to time by regulations on registered insurers carrying on -

(a) general business under this Act (referred to in this section as "abr-rsiness levy"); and

Fund. a Contr ibut ion-

to the Pol icyOrvners'Protection

general Fttntl

(b) lit 'e business under this Act (refened to in this section as "a lif-e business levy").

r 5 8 .\ tr y.i p I e, ;t ctt t t o Ofli r: r a I G tt:e ire l l4 th January 20081

Manaqcmento f t he Po l i lOrvners'ProtectiorrFund

Cap. l3,s

(2 ) - fhe

proccec is o i t l l c gcnera l b t i s iness le 'n ' i , : ind l i i e bus !ness le r ,1 , r ,u rc ie r sLrbsec t ion ( l )sha l lbe pa ic l in to the Po l icy O ' *ncrs 'Prore c t ion i r r -u - rc i .

(3) Tl le anlo' . tnts recluirecl to be paid b1'any registrrccl insLrrcr Llr)c lcr the gencrzr l businessle r,'v or the lif 'e business 1s1'f itt an', fitrancial year shall not e xce eci L)r']c per cent of ai1,, incorre of thei t tsurcr l 'or the 1'car endir .rg lasi befbi 'e ihe bcgrnning of that f lnancial 1,ear iv.hich inctme is l iable tothc -gene'r I business levi , or the l i f 'c bLrs in css lcvy, as the casc nia1, be.

(4) The anloLint eaci i registerecl insurcr inay'be recluir :eci io pa1,under t l ' ie general bLrsinessleVY i t l lposed in any f inancial y ear shal i be calculater l b1' rei 'crencc to t ie gross prei i iurn incope ofSeychel les pol ic ies of the insurcr fcr- the rvcar ei ic i inq last before the beginning ofthat f inancial yearin respect of general bi is iness can' ied on uncier this Act other than r. i , l r*ron.. business; einci anysuch incon]e as is l tereafter in this sect ion referred to, in relat ion to anl,registered insurer. as incorneof the insurer fbr the Year in qLrest ion r ,vhicir is inconre l rabie to the gcncraibusine ss levy.

(5) The atnount each registered insurer nay be reclLrirecl to pay r,rncler life br.rsiness lev1,imposed in any' f inancialyear shal l be calcuiatecl by referenie to the gross premium inconre of theinsrtrer for the year ending last before the beginning of that financial yiar inrespect of life businesscarried on under this Act other than reinsLrrance br:siness; and any such income is is hereafter in thissection refered to, in relalion to any registered insurer, as incorne of the insurer ior the year inquestion which is income liable to the life business ler,)..

(6) In subsections (4) and (5), the gross premium incorne of a registered insurer for anyyear in respect of any class of insurance business carried cn under this Act other than reinsurancebusiness lrleans the gross amounts aiter dedr-rcting any retum of prerliurns recorded in the accountsof the insurer during that vear as paid or due to the insure r b1,.r.,,a1, of prerniums under that class.

90.(1) Subject to subsect ion (2), the proceeds of the general br:s iness levy may be appl iedonly on expenditure incured by theAuthori ty under sect ion 88 (2) (a)( i ) and the proceecis of l i febusiness levy may' be applied only on expencliture incured b1' the Authoritl, .,n,1.. sectjon gB(2XaXi i ) .

(2) The Autirority may deduct any expenditure incurred by it in perfbnning its functionsunder this sectior-r from the Fr-urd.

(3 ) Without prejudice to the generality of section 124, regLrlations made under this Act mayprovide -

for the impositiort, distribution and enforcement of tfre general business levy andlife business levy and other matters in connection with or in relation to thoselevies; and

(b) for the investment of sr.rch parl of the Fund as appears to the Authority ro be asurplus over its requirements f,or the time beins.

(1) For the purposcs ofthis sectior.r -

(a) "compulsory insut 'ance pol icy" means any pol icy or securi ty.uvhich sat ist ' ies therequirenletrts of the Motor Veiricles InsLrrance ('l-hircl Party Risks) Act;

(b) rcf'erettces to a rcgistercd insurcr in liquiclation are ref'elenccs to an insLrrer rnrvhose case -

(a )

[14th January 2008] Supplement to Olficial Gazette

(i) a resolution has bcen passed after the conrmencernent of'this Act iti accordance gxp. 49rvith the provisions of thc Cornpanies Act l 'or the volunlary lvinding up of,theinsurer, otherrvise than merely fbr the purpose of reconstruction of thc insureror of amalgamation rvitir another insurer;

(ii1 rvithout any such resolution having been passed beforehand, arn order has bcett g",, 49made zrfier tfrat date for the wincling up of the insurer by the Court under theCompanies Act on a petitiotr presented after that date; or

(c) ret-erences, in relation to a registered insurer in liquidation, to the beginning of theliquida,lion are references to the passing of any such resolution or the making of anysuch order as is ret-erred to in paragraph (b), as the case may be; and

(d) a registered insurer, not being an insurer in liquidation, is an insurer in financialdifficulties if-

(, in the case of a company -

A. a provisional liquidator has been appointed in respect of the insurer under 6uo. 46the CompaniesAct;

B. it has been proved, in any proceedings on a petition for the winding up of 6"p. aethe insurer under the Companies Act, to be unable to pay its debts; or

C. an application has been made to the Court under the Companies Act for goo.46. the sanction of a compromise or arrangemellt proposed between theinsurer and its creditors or any ciass of them (rvhether or not any of itsmembers are also parties thereto) and the terms of the compromise orarrangement provide for reducing the liabilities or the benefits providedfor under the insurer's lif-e policies;

(i, in the case of any other corporate body, the corporate body is in the opinion cftheAuthority, unable to pay its debts.

91.(i) No compensation shall be paid under section 88(lXb) in relation to a motor vehicle the pr.scriptionuse of which is covered by a policy of insurance in respect of third party risks under the Motor Vehicle of ci,rims

Insurance (Third Parly Risks) Act, where the orvner or driver of the motor vehicle at the time of sucir cap. 135use -

(a) has been identified;

(b) is resident in Seychelles;

(c) would, on the balance of probability, be liable in damages in proceedings institutedagainst the orvner or driver in a court in respect of the damages arising out of suchuse; and

(d) rvould be covered in respect of the liabiiity by the policy of insurance.

(2) Where the Authority pays any money out of the Fund to any person eligible for payme nt

orit of the Fund, the Authority shall be subrogated to the extent of such payrnent to the rights and

renredies of that person in relation to the matter for which tlie payment rvas made.

i 5 9

r60 Strp p i e nt e: n no Ol/ic io I G azelte | - l th Janurry 10081

I )or t 'cr o lALrthor i t r toi sstr cd i l c c t i on

I 'ART X - INSI}E{] 'TION AND IT{\ /ESTIGATION

i Z . f f l \ \ 1 h c r c i h c A r - r i h o r i t r i s o l t h e r , i e n ' t h a , . a l j c e n s c , i o r r e g i s t c r e c l p c f s o n i s n o t c o n r p l y r n glvi th anl prrvis ion oi thrs Act. i t r rrai direct t l rc i iccnsec or resistered person tc conrply 'rv i t l r suchpror, ' is iou.

(2) .A l iccnscc or registcreci person rvho fai ls to conrpl ; , , rv i th a cl i rect ion issLrccl undersubscct ion ( I ) corr r r r r i ts an of l incc punishable Lrnc ler sect ion I I 9 .

r {cqLrcsrot . 93.( l ) ' lhe

Author i ty nray, for the p l l rpose of 'd ischarging i ts f i rnct ions, by not ice in l ' r r t rng.in tbrnret ion requi re a l icensee or regis tered pcrson to prov ic lc i t

(a) rv i ih such information s1 dn, ' rrrnenr nq mq\/ he cnggif igd in the not ice in the ntannerspecif ied therein;

(b) ivith a report, in such fbnu as may be specrlied in the notice, by a person rvho hasreievant prot-essional skill and rvho is approved by the Ar-rthority on, or on anyaspect of, an1 matter in relation to which the Authority may require infon-lrationunderparagraph (a).

(2) The notice under subsection ( 1 ) may reciuire the infomration or document to be verified ina manner specifled therein or bv a pcrson referred tc in subscction ( l)(b).

(3) The pou'er to require infcmation and documents under subsection ( i) shall extend to anyperson lvho, in the opinion of ihe ,/rr"rthority, appe ars to be in possession of sr,rch inforn-iation anddocuments.

(4) \\4rere Cocumenls are pror,ided, the Authority mair take copies of or extracts lrom themand require -

(a) any person rvho is a present or pasi principal officer, controller, paftner, nranager orernployee of that l icensee;

(b) the person oroviding a document;

(c) in the case of an insurer, any insurence agent, broker, manager or insurancesalesperson rvho acts, or has acted for that insurer,

to provide any explanation on such docurnent.

(5) Where the infomation or document re quested is not in the possession ofthe person who isrequired tc provide it, that person shall state, to the best of his knorvledge and belief, where thedocunrent cnn be founci.

(6) Any'person rvho" r.vithotlt reasonable excrise, fails,to courply r,vith any recluirer.uent ofthissection conrmiis an ofJ-ence pr.rnishable under section 1 19.

on-s i tc 94 . ( l ) TheAr" r thor r t ) 'mr ) ,a iany t ime, inspec t theaf fa i rso fa l i censeeor reg is te redperson ininspection order to verity rvhethei the licensee or registered person

(a) is complying rvi th the provisions of this Act, or the condit ions of the l icence or theregistration;

(b) is conduct ing i ts busirrcss accorcl ing to sound insurance pr inciples;

[14th January 2008] Strpplcment to Official Gazette t 6 l

(c) sert isf ies cr i ier ia ol standards set out in or rnadc Lrncler this Act ot 'at ty ot l tcr

appl icabie rvr i t ten larv i i rc luding the hnt i-Moncy i .aundtnng t \ct , 2006 art tc l thc

Prevcntion oI'l 'errorisrtt Act, 2004.

(2) F'or the purpose o I can ying ont an inspe ct iot i uncler subsect ion ( I ) , thc Aut lror i ty mav

appoini as inspector any person, whether or not zin ernployee o1'the Authoritir who is an attditor,

actuary or any perscn of requrred cot.llpetencc.

(3) An inspection may take place at the head office, a branch oflce or any prenrises rvhere

the business of ihc l icensee or registered person is conducted or records of the bustness are

maintained.

(4) For the purpose of the inspection. the inspector may -

ta) request such information and doc'.lments in such fbmr and medium and put such

questions and require such explanations as ihe inspector thinks llecessary;

(b) enter any prelnises used or apparently used by the licensee for business purposes;

(c) exatnine and make copies of, or take extracts fi 'om, documents:

(d) record any information or make a copy of any information kept in elecironic form;

(e) seek information, explanation or clarification about any document or

infonnation;and

(0 make such request as would assisthim in the inspection'

(5) A licensee or a reqistered person shall, for tlie purpose ofan inspection under this Part,

proyide tlie inspector rn,itl-r such facilities and assistance as may be necessary for him to carry out the

inspect ion ef lect i vely.

(6) Any person rvho obstructs an inspector in the performance of his duties under this

section commits an offence punishabie under section 1 i 9.

95. ( 1) Where the Authority has a reasonable suspicion that a license e or registered persoll - lnvestigation

(a) has committed, is committing or is likely to commit a breach of any provision of

this Act or any condition attached to the person's licence or registration,

(b) has tailed, is faiiing or is likely to fail, to comply rvith any direction issued'ny the

Authority under section 93( 1);

(c) has comrritted, is committing or is likely to commit an offence against any

other rvritten law;

(d) has carried on, is carrying on or is likely to carry on any activity rvhich may cause

serions prejudice io its customers, ol'to the soundness, stahilit)' and integrity of

tire insurance busine ss sector;

(e) in rhe case of an insurer, has failed, is failing or is likely to failto maintain a

financially sound condition in accordance rvith Part ll l; or

(0 has failed to provide an-v infomtation or docunrent req'"restecl by the Authority,

the Authority may rnakc an investigation into the business or any part of the bttsitte ss ofthe licettsee or

resistcred person.

162 StLpplentent to O/Jicittl Gazette l l4th JanLrary 20081

(2) For the purpose of an investigation uncjer subsection ( 1), the Ar"rthority ntal', b1' notice inivriting, require -

(a) a l icensee or registered pcrson r 'vhose afhirs are to bc invest igatcd to attencl , at aspecif ieci t inrc and piace, : inr i answer quest ions or othenvise furnish intornrat ion orprocluce such docutnents as nial' be required lvith respect to alt)' mettcr rclevant tothc invcst icat ion; anci

(b) any' principal ofllcer of the Iicensee or registered person to fumish infonlation or toproduce an.v docuinent in such officer's cr-rstocly or control.

(3) The Authority may take copies of or ertracts tionr any document produced unclersubsect ion ( 1) and ntay lequire the person prociucing the docr.rntent to give any explanat ion relat ing tosuch docunient.

(4) Where material to lvhich an investigatiou relatcs consists of infomtation stored in acomputer, disc, cassette, or on microfllm, or preserved by any mechanical or electronic device, therequest from the Authority shall be cieemed to require the person named therein to produce it or siveaccess to it in a form and medium in which it can be taken away and in rvhich it is visible and legible.

(5) Subject to subsection (6), any person required to attend and answer questions orotherwise to funrish information or to produce any specified documents or any documents of aspecified class shall not, rvithout reasonabie excuse, refirse or iail to answer a question or furnishinformation or produce a document or class of documents.

(6) lt shall be a reasonable excuse, fbr the purposes of subsection (5 ), for a person to refuse orfail to ansu,er a question put to hinr or to refuse or fail to produce a docuntent or class ofdocuntents thathe was required to produce, rvhere the anslver to the question or the production of the document orclass of docuutents might tend to incriminate him.

(7) An investigation may take place at any or all the premises rvhere the business of thelicensee or registercd person is conducted or records are maintained bi,' the licensee or registeredperson.

(B) For the pr-rrposes ofthis section, thc Authority may -

(a) seize any document, article, object or any electronically stored information whichtheAuthority finds necessary; and

(b) suminon any person under investigation, the person's officers or employees, or anylvitness necessary for the conduct ofthe investigation.

(9) The Authority may appoint any member ofthe staff of the Authority or any other person tobe an investigator who shall have ail the porvers oftheAuthority under tiris section.

(10) An investigator shall on request show his designation as investigator duly signed by theAuthority or any other person authorised by theAr"rthority.

(1 1) An investigator shal1, in respect of every investigation carried out under this Part, make ar,vritten report to the Authority together with such observations, comntents and recontmendations ashe thinks fit.

( 12) A statement made by a person in cornpiiance lvith a re qllirement r.rnder this section may beused in evidence.

( 13) Any persor.l rvho -

[14th January 2008] Suppienient to O.fficiul Gazette r63

fa i ls to conrply rvi th any requirement ofthis scct ion;

obstructs an investigator in the performance of'an.v of hrs cluties r-urdcr this scction;

f ai ls, rv i thout reasonablc cal lse, to compl l ' rv i th any direct ion of an invest igator inthe perfonrance of his dutie s under this scction;

in relation to any qr.restion put to hirn by an investigator in the performance of hisdut ies under this sect iorr

(i) says anything, or provides any infonnation or document -

(A) that the person knows to be false or misleading in a materialpar l icular;or

(B) recklessly as to rvhether it is false or misleading in a materialpart icular;

(i, refuses, without reasonable excuse, to answer,

commits an offence and shall on conviction, be liable to a fine not exceeding I million rupees and toimprisonment for a ternr not exceeding 3 years.

96. ( 1 ) Where, at any time, it appears to the Authority that - iii,H::"

(a) it has grounds under section 95 to cany out an investigation into the business of al icensee; or

(a) there are grounds under section I 1 0 for the revocation ofa licence or under sectionl0l for the appointment of an administrator,

it may, by notice in writing, suspend wholly or in part, the licence of a licensee.

(2) TheAuthority shall not suspend a licence under subsection (1) unless it has given priorwritten notice to the licensee of its intention and its reasons for doing so, and has afforded thelicensee reasonable opportunity to make repre sentations on the mafter to the Authority.

(3) Subsection (2) shall not apply rvhere the Authority considers that delay in suspendingthe licence rvould not be in the interest ofpolicyholders or of the public, provided that the licensee isgiven the opportunity to make representations as soon as practicable.

(4) Where a licence is suspended under subsection ( 1), the licensee shall -

(a) not carry on the business or the part of the business to which the suspension relatcs;

(b) continue to be subject to any provisions of this Act as if the licence had not beensuspended.

(5) A suspension under subsection ( I ) shall have effect as a suspension ofthe licence ofanyinsurance agent of tire insurer and of the registration of any of its insurance sale spersons in relation tothe whole of the insurer's business or to the part of the insurer's business in respect of which thelicence has been suspended, as nray be applicable.

tal

(b)

( c )

(d)

t64 Sttpplentent to OfJicial Gtzette [4th January 2008]

Eflcct ot 'suspcnsi ono f I i c cncc

Por\er t0enterprem rses

Tampcringrvithev idcnce

Meaning ofcertai nrvords

Appointrnento fadm in i s t lutor

(6) Thc Authori t l , shal l give rvntten not ice of any decision to suspend a l icence undersubsect ion ( 1 ) .

9T.Asuspension of a l icence shal l not prevent a l iccnsee from -

(a) continuing to carry on business in relation to an insurance polic), issr.ied be fbrc thedate on rvhich it was notified, in accordance with section 96, ofthe suspension; or

(b) issLring or dealing rvith an insurance policy in pursuance of a tetm in an insurancepol icy subsist ing atthat t ime ,

and for the plrrpose of doing so the licensee shall be deemed to be licensed,

98.(l ) For the purpose of carrl,ing out an inspection under section94 or an investigation undersection 95, the inspector or investigator, as the case may be, may at any time during normal businesshours enter the premises of a licensee or registered person in order to -

(o) inspect, take possession of or make copies of or take extracts from any documents,books or records; or

(b) have access to or take possession of any computer, disc, cassette , microfilm or anymechanical or electronic device used to store or preserve infonnation.

(2) Any person who obstructs an inspector or investigator in the performance of his dutiesunder this Part or prevents him from entering the premises of the licensee or registered personcommits an off-ence punishable under section 1 i 9.

99.Any persor.l who-

(a) destroys, falsifies, conceals ordisposes of; or

(b) causes or permits the destruction, faisification, concealment or disposal of,

any document, information stored on a computer or other device or other thing, which the personknows, or ought reasonably to know, to be relevant to an inspection or investigation under this Partcommits an offence punishable under section I 19.

l00.For the purposes ofthis Part-

(a) any reference to a "licensee" shall, except for sections 96 and 97, include -

(, a registered person who acts or has acted on behaifofthat licensee or anypast or present.employee of that registered person,

(i, any person who is a past or present principal officer, partner, manager,employee or controller ofthat iicensee;

(b) any reference to the "Authority" shall include any person designated from atnongthe staff ofthe Authority or appointed by theAuthority.

PART XI -ADMINISTRATOR AND CONSERVATOR

101.( 1) Where a licence is wholly or partly suspended under section 96 or revol<ed under sectionI 10, the ALrthority rnay, subject to subsection (2), appoint a person as administrator-

[4th Janr-rary 200E] ,Supplement to OJficial Gozette 1 6 5

in rc lat ion to the lvhoie ofthe business of the l ie ensc' ; ; or

in rclat ion to the part of the bLrsiness of t l re l icensee r.rhich is subject to a suspensionor revocat ion.

(2) TheAuthori ty shal l not appoint as adnt inistrator-

(a) a body corporate;

(b) anundischargeclbankrupt;

(c) a mortgagee ofany property ofthe licensee;

(d) an auditor or actuary of lire licensee;

(e) an ofllcer of the licensee or of any body corporate which is a mortgagee of theproperty ofthe licensee, or

(0 apersonprohibi tedfrommanagingaconrpanyundertheCompaniesAct. cap 40

(3) The remuneration payable to an administrator shall be determined by the Authority.

102.(l) An administrator appointed under section 101 shall manage the whole or part of the Dutiesand

business entrusted to his administration and for that purpose - il;]il'oi,:,",

(a) shall carry on the activities ofa licensee in accordance rvith section 97;

(b) shall comply rvith directions given under subsection (2); and

(c) shali manage the business or part of the business effrciently.

(2) The Authority may give such directions to the administrator as to the administrator'spowers and duties as it deems fit in the circumstances of the case, and the administrator may apply tothe Authority for instructions as to the manner in which the administrator shall conduct themanagement of the business of the licensee or in reiation to any matter arising in the course of thatmanagement.

(a )

(b)

1O3.Where theAuthority cancels any suspension of a licence -

(a) the powers and duties ofthe administrator in relation to the licensee shall thereuponcease; and

(b) the administrator shall take all actions necessary to facilitate the retum of themanagement of the whole or, as the case may be, the part of the business to thel icensee.

l04.Where the Authority has reasonable cause to believe that -

(a) the stated capital of the insurer is impaired or there is a threat of such impairment; or

(b) the insurer has, or its directors have -

(i) engaged in practices detrimental to the interests of its policyholders andcreditors:

Cancellation ofsuspension ofI i cence

Appoinlmentof consen'ator

1 6 5 Sttnplentent ro Officicti Gozete l l4th January 20081

Dut ies andporvers ofconservator

l'crnr ofofflce andrent ulteratlonof 'conservalor

(ii) l<noil' ingly or negligently perlnitted its chief executive gfIccr, an)/ of itsothcr managers, of f lcers, crnploveres, insurance agents or salespersons tocontravene any provision of ih is Act or any dircct ion of the Authori ty or anyother lvrittcn iar.r';

( . ) co' t ravent io 's refc*ed to i 'paragraph (b) are l ikcl l , to occur;

(d) the assets of thc insurcr are not being maintained in accordance rvi th solvencyregulations, or arc Itot sufllcient to give adcquate prolection to its policyholclers orclcd i tors;

(e ) the solve ncy rnargin oi ' the insurer is. or is l ikely to be, def ic ie1t,

it niay appoint a conservator rviro may be an employee of the Authority or any other sr-ritablt: person.

105.(1) The consen'ator shall take charge of the business of the insurer and all of its property,books, records and effects and shall exercise all por.r,ers necessary to preserve, protect and recover anyof the assets of the insnrer, collect all monies and debts due to it, assert causes of action belonging tbthe insurer and file, sue and defend suits on its behalf.

(2) The conservator may -

(a) overrule or revoke actions of the board of directors and the manasement of theinsurer; or

(b) suspend the por.vers of the board of directors of the insurer durins the period of theconservatorsh ip.

(3) The conservator may -

(a) subject to subsection (4), suspend, in whole or in part, the repayment or rvithdrau,alof claims and other liabilities ofthe insurer;

(b) subject to paragraph (d), disaffirm or repudiate any contract to r.vhich the insurer is apany;

(c) enforce any contract entered into by the insurer, notwithstanding any provision ofthe contract providing for temrination, defauit or acceleration by reason ofinsolvency or the appointment of a conservator,

( d) disafilrm or repudiate a contract that, in his opinion, is frauduient.

(4) Any money and other credits receiveci while the insurer is under conservatorship shall bekept in a separate account and shall not be used to liquidate any indebtedness ofthe insurer eiisting atthe time the conservator was appointed or subsequent indebtedness incurred in order to dischargesuch indebtedness, save as it is necessary to carry on the business of the insurer with a view to itsrehabi I i tat ion or re-organisat ion.

(5) The conservator shall report to and be accountable to theAuthority.

106.(l) The temr of office of the conservator shall continue, unless the conservator is replaced,until such time as the Authority finds that-

(a) tlte insurer is rehabilitated or re-organised, so that it may be retlrmed to the insurer'sl.nanagement or a new managemcnt under sr-rch conciitions as are necessary toprevent a recurrence ofthe conditions that gave rise to the conservatorshio: or

[14th January 2008] SLrp[,lentent to oflicial Ga:etre

(b) the insurer is in such condit ion that i ts cont inuance in business n'ould not involveprobable loss 1o i ts pol icyholdcrs anci othcr crecl i tors.

QYfhe remuneration of the consen,ator ancl the indcmniflcation of the conservator fiomliabi l i ty to third persons on account of al l act ions taken in good f ai th shal l bc borne by the insurer.

(3) On the termination of the consen,atorship, every ciirector of the insurer sliall resume Iiq cap '10

offtce except where a director is found by the Authority not to be fit and proper to resume hisdirectursh ip.

107.( I ) The conservator shall obtain tire authorisation of the Authority to -_ Relrabilitation

(a) rehabilitate the insurer and return it to the managenent; or :;:ffi11""

(b) re-organise the insurer in accordance rvith the otherprovisions of'this section.

(2) Where the Authority authorises the conservator to proceed to re-organise the insurer, theconservator shall, after granting a hearing to all interested parties, propose a re-organisation plan andsend a copy of it to all poiicyholders and other creditors rvho rvould not receive full payment under there-organisation plan.

(3) . The copy ofthe re-organisation plan shall be accompanied by a notice stating that wherethe re-organisation plan is not refused in r,vriting within a period of 30 days by persons holding not lessthan one-third of the aggregate amount of claims of policyholders and creditors cornprising not lessthan one-third in value of the aggregate of the claims of creditors other than subordinated creditors,the conservator shall, with the approval of the Authority, proceed to cary out the re-organisation plan.

(4) Tlie approval of a re-organisation plan by the Authority shail be subject to its finding thatthe re-organisation plan shall -

(a) be equitable under the circumstances to policyholders, other creditors andshareholders;

(b) provide for bringing in new funds so as to meet the minimum margin of solvency inaccordance with section 15.

(c) provide for the removal of any officer or empioyee responsible for thecircumstances which necessitated the appointment of the conservator.

(5) Where in the course of a re-organisation it appears that circumstances render the planinequitable or its execution r"rndesirable, the conservator may recommend that the Authority petitionthe Court under section 65.

108.The administrator, the conservator or any person acting on their behalf shall not be liable to tmmunity orany proceedings, whether civil or criminal, in respect of anything done or omitted to be done in ,h. l '1,i.,,n,,,r",n.bona fide performance of a function under their appointnrent. ancl the

I'ART XTI _ TETTMINATION OF LICENCE

109.( i ) A licensee may surrender its licence afier giving the Autlionty rvritte n notice of at least Sun.en<ler ofone month - l icencc

(a) before adopting a resolution for the voluntary rvinding up;

1 6 7

r 5 8 ,Srrpplement to Ofric'ial Gozette f l4 th JanLrarv 20081

(b) pr ior to thc ccssal ion of 'bi"rs ine ss.

(2) A not ice'utrc ' ler subsect ion ( l ) shal i specity thc nreasures that lhe l icensee shal l take todischarge al l i ts obl igat ions uncie r insurance polrcies aird to ureet al l of i ts other l iabi l i t ies.

(3) fhe surrcnder of the l icence shai l bc o1'no el ' lect anr l lhc l icenscc shal l cont inuc to bcsubject to the reqrr i rements ancl obl igat ions Lrnclcr this Act and thc condit ions of i ts l iccnce ancl thedirect ions of the ALrthori ty unt i l the Authori ty af ier cancel l ing the l iccnce gives pr-rbl ic not ice of thecance l la t ion .

H:::::" 110.( I ) Where it appe ars to the ALrthority that -

(a) the l icensce has ce ased to carry on the busine ss fbr u,hich i t was l icensed;

(b) the l icensee has fai led to commence business rvrthrn 6 months from the date onr,hich i t u 'as l icensed;

(c) there exists a ground lvhich, under any provision of this Act, rvould have preventedthe licensee from being licensed;

(d) the iicensee has lailed to flrlfi l an obligation to n'hich it is subject by vitue of thisA c t ;

(e) the l icensee is unable to meet i ts f inancial obl igat ions or to keep the solvencynrargin,

(l) the business of the licensee is not bcing canied ori in accordance with soundlnsurancc pnnc lp lcs :

(g) the licensee has contravened any of the provisions of the Act or any conditior-rimposed on its licencc or alry directior-rs given by the Authority under this Act,regardless ofrvhetherthere has been any conviction for an offence in respect ofsrrch contravent ion;

(h) the licensee has furnished false or mrsleading information or has concealed, orfailed to disclose material facts in its application for a licence or in any retum filedunder this Act;

(i) the iicensee has been convicted of an otTence under this Act or any other written lalvrvhether in Seychelles or elsewhere;

0) the licensee proposes to make or has made a con-rposition or arrangemerrt r,vith itscreditors or goes into receivership or liquidation, is wound up or is dissoive d; or

(k) an insnrer, being a foreign company, has ceased to be authorised to issue insurance- policies or to make contracts of a particular Cescription as a result of being

convicted of any off-ence under the la-w governing insurancc business or an offenceunder any other written lalv in the courrtr-v rvhere it has its iread office, theAuthorityrnay forthrvith revoke tlie licence.

(2) Where a licence is revokcd, tire Authority shall give -

(a) pLrbl ic not ice ofthe revocat ion;

(b) directions to ensurc that the interests of'policyholdcrs and the public are presen ed.

[14th January 2008] Supplement to O./JiciaL Gazelle

111.( l ) Aperson rvhose l icence has been revoked shal l not, uniess otherrvise directed by the Ei lectof

Authority, be allolved to unclcrrvrite nerv insurancc policies or renews any existing insurance policies, rcvocatrorl

but shal l cont inue r-o be sr. t l - r ject to thrs Act to the same extcnt as a l icensee and shal l col t t inue to

discharge i ts obl igat ions so long as i ts l iabi l i t ies rentain unsat isf iecl .

(2) l 'he Authority nray direct the licensce r.r'l iose liccnce has been tevoked to tak-e sucl-tmeasures as circumstances may rvarrant to ensure thc orderly'lvinding Lrp or the transfer of itsbusiness.

PART XI II- h{ISCELLANF]OUS

112.( l ) Where, the Authori ty is making an invest isat icn, an appl icat ion may be made by the Fr".r innAuthority to a Judge in Chambers and if the Jr,rdge is satisfied that the Authority has reasonable orcler

-

grounds to suspect that a licensee or any substantial shareholder ol'a licensee has comtnitted an

offence underthisAci, the Judge ntay order-

(a) the prohibition ofthe licensee or the substantial shareholder or any other personacting or holding assets on its behalf from disposing, transferring or pledging anyof its assets or making any lvithdrawal from any account or deposit at any bank orfinancial institution;

(b) the attachment in the hands of any person named in the order of all moneys andother property due or owing, or belonging to, or held on behalf of, the licensee orsubstantial sharehol der;

(c) the licensee to make a full disclosure, r.viihin such time as may be specified in theorder, ofail its possessions and the nature and source ofsuch possessions;

(d) any persoli nanted in the order to make a full disclosure of any offence under thelaw governing insurance business or an offence under anv other written law in the

country r.vhere it has its head office, aii moneys and property held by the person onbehaifofthe licensee or substantial shareholder; or

(e) the opening, in the presence of a person authorised by the Authority, of any safedeposit box held on behalfofthe licensee or substantial shareholder.

(2) Where an order is made under subsection ( I ) (a), (b), (d) or (e) the Authority shall give

notice thereofto the licensee or the person named in the order.

(3) Wherc notice is given under subsection (2), any person Wlio aliows, procures or

facilitates the disposal ofmoney or proper-ty belonging to the licensee commits an offence punishable

undersect ion I 19.

(4) The Judge in Chambers may, on tire appiication of the Authority or the licensee and ongood and sufilcient cause shorvn, authorise such reasonable amounts to be withdrawn from a bank or

other financial institution fbr the ordinary running of the business of the licensee, on such conditionsas the Judge dcems f i t .

(5) Thb order may be revoked at aily time by a Juclge in Chambers on application by the

Authority upon reasoilable cause sh"own.

(6) The Autlrority shall be a party tc'' any application under subsection (4).

l6L)

1 7 0 Supplentertt to Olficiul Guzelre I l zi th Jarruary 2008]

I nj Lrnct ivtr e l i c l ' andlocus

Exchange o Iinformat ionancl nrutualassistance

Prohibi t ionsorr use ofcertain u,ords

113.( i ) ' l 'he

Authon ty rnay appi i to a J udgc in C hanrbers {br an intcr int order in respect o1'anymatterrelat ing to i ts object ivcs Lrndcf scct ion l .

(2) Without preju.lice to subsection ( i ), air orclr:r Luldcr thal sLrbsectior.I rnay direct the pcrsontodoaspec i f iedac tor re f ia in i ionr r io rngaspcc i l l c i l ac t , i i ) r ihepur i rosco f '

(a) prcvent ing a c0l l i rav. i l l ion;

(b) cornpei l ing an1. 'pcrson to ccinrply iv i ih a laivf i i l rcqLlest or c l i rccl ion nrar le r . , r issucdby the A ut l ior i tv undcr this Act;

(c) rcinedying the etf'ects cf a contravention;

(d) preservingt l ie assets heldby a relevantperson.

(3) -l 'he Authoritl ' shall not be lequiled to give an underlaking as to danrages as a condition

for obiainins an interinr order under this section.

(4) Aperson aft 'ected by an ordermade undersubsect ion (2) shal l rv i thin 21 days of beingserved rvith the order have a right to shorv cause rvh-v the order should not be maintained.

(5) Without prejr-rdice to other provisions ofthis section, the Authority shall have the power -

(a) to ask for and obtain cleclaratory orclers front tlie Court;

(b) to seek gr-riCance and dircctions frorr the Cotin on any poini of larv or as to theinterpreiation of any provision ofthis Act;

(c) to intervene in anv ploce edrngs in which a licensee or registered person is a party.

114.(1) The Authoritir may exchange rvith a supervisory body any information relevant to theadministration ofthis Act for the purpose of discharging the functions of the Authority or of that body.

(2 ) Any in fb rmat ionundersr - rbsec t io i r ( l ) rnaybeg ivensub. lec t tocond i t ionsspec i f iedbytheAuthority, incluciing conditions restrictingthe use and disclosure of such infonnatior-r.

(3) The Auihority may, in furtherance of its objects under this Act, enter inio an agreementfor the exchange of information with a foreign or domestic supervisory instituticn or a larvenforcement agency or an international organisation, where the Authority is satisfied that thedomestic or foreign suoervisorlr institution, tire lalv enforcenient agency or the intemationalorganisation, as the case may be , woi"rld protect the confide ntiality of the infonration.

l1 5.( 1 ) A person rvho, not having the approval of the Authority or not being a licensee -

(a) uses or continues to use the r.vords "insnrance", "assurance", "Llncierwriting","reinslrrance", "reassllrance", "surety" or any other word lvhich in the opinion ofthe Authority connotes insurance business, or any of their derivatives in English orin any other language, in the description or titie unc'rcr rvhich the person carries onbusiness in or fronr lv i thin Sevchel les: or

(b) nrakes or continues to nrake a1ll, representation in airy'billhead, letter, letterhcad,circular, paper, not ice, adveri isemcnt oi in rny olher ur i ln lrer, that he is carrying oni r rsuruncc b t rs iness"

[14th janLrary 2008] ,Supplement to Official Gazette

conrmits an oft 'ence punishable under sect ion 1 19.

(2) Before giving its approval under subsection ( l), the Authority may require any person tofurnish such references and information as it may specify.

ll6.Where any adverlisement, brochure or similar document lvhich relates to the business of I A<tverriscmentl icensee or registered person or to an insurance pol icy and is pLrbl ished by a person, is misleading orcontains an incorrect statement of fact, the Authority may by notice direct that person not to publish itor to eflect such changes in it as the Authority nay specify.

I l T.Where the Authority is satisfied that failure bv a person to comply rvith the provisions of this porver to extcnclAct or any direction within the required tinre limit was due to a just or reasonable cause, it may, upon a tirne limit

written application made by the person, extend by notice to the person the time limit to such time and.on such condit ions as i t may determine.

118.( l ) Whereapersonhascontravenedsect ionT,theAuthori tymaybynot icedirectthatperson Insurancebusinessto make arangements satisfactory to the Authority to discharge all or any parl ofthe obligations under tff;l 'ted in breach

insurance policies already entered into by that person.

(2) No transaction in the course of effecting or carrying out an insurance policy shall be voidor voidable merely by reason that at the time of that transaction any party thereto is in breach of anyprovision of or any requirement under this Act.

119.Any person lvho contravenes any provision of this Act or any regulation made under this [s1 Miscelianeouscommits an offence, and shall on conviction be 1iable, where no other penalty is specifically provided oncnces

for in the Act or regulation as the case may be, to a fine of Rs100,000 and to imprisonment for a termnot exceeCing 1 year.

1 20.( I ) The Authority may, having regard to the interest of the public and the policyholdep5 36d Public noticeto the reputation of Seychelles, give public notice ofthe fact that a particular person -

(a) has ceased to be a licensee, whether by the cancellation, revocation or surrender ofthe licence;

(b) has had its licence orregistration suspended;

(c) is not or has not been a licensee or registered person; or

(d) hasbeengranted al icenceorregistrat ion.

(2) Where the Authority is required to give public notice of any matter, it shall cause a noticeto be published in the Official Gazette and a daily newspaper.

(3) By a notice under subsection (2), the Authority may state that any document may beperused at the office of the Authority or on its website or on the bulletin of the Authority, or at suchother place as nay be specified in the notice.

121.(1) Subject to subsection (2), neither the Authority nor any employee or agent of the confidentiaiityAuthority shall disclose any information or docurnent acquired in the performance of its, his or herduties under this Act, including those in respect of any insurer or an insurance professional licensedunder Part VIII or any policyholder.

(2) Subsection (I ) shall notapplyto any disclosure-

l l l

t 1 2 Supplentent to Official Gazette [4th january 2008]

Spccialconcessionfor certaininsurers

J udic ia lrevierv

Regulations

Transitional

(a) larvfully required by any written law or any court of competent jurisdiction inSeychel les;

(b) in respect of the affairs of any licensed insurer or insurance professional licensedunder Part VIII or a policyholder as the case maybe, with the written consent of suchperson; or

(c) where the infbrmation disclosed is in statistical tbrm or in any other manner thatdoes not enable tlie identity ofany licensed insurer or other insurance professionallicensed under Part VI II or any policy holder to rvhich the infonnation relates to beasccrtained.

122.A person licensed to conduct and engage in non-domestic insurance business shall be entitledtothe exemptions and concessions specified in the Second Schedule.

123.A person aggrieved by any decision of the Authority made in the discharge of its functionsmay apply to the Court for the review ofthe decision in exercise ofthe Court's supervisory jurisdiction

under article I 25 ofthe Constitution.

124.(l) The Minister may, in consultation with the Authority, make regulations for *

(a) carrying into effect the provisions ofthis Act; or

(b) amendingtheSchedules.

(2) Such regulations may provide for offences and penalties not exceeding fines ofRs100,000 and terms of imprisonment not exceeding 1 year.

125.( I ) The Insurance Act, 1994 (Act 28 of 1994) is repealed.

(2) Notrvithstanding subsection (l), an insurer lawfully carrying on insurance businessunder the repealed Act on the date of coming into operation of this Act may continue to do so for aperiod of l2 months from that date, and not later than 90 days before the expiration ofthat period anyinsurer wishing to continue carrying on such business shall apply for a licence under section 10.

126.On the coming into operation of this Act, all the assets and liabilities of the Policy Orvners'Protection Fund established under section 45 of the Insurance Act 1994 and existing immediatelybefore the coming into operation of this Act shall vest in the Policy Owners' Protection Fundestablished under section 88 ofthis Act.

FIRST SCHEDULE

CLASSES OF POLICIES

Part I

Long term insurance business

(Sections 2 and 4)

Class of business Description

Lif 'e insurance business The business ofundertaking liability under contracts upon human life orcontracts to pay annuities on human life, but does not include pennanenthealth insurauce business and personal accident insurauce business.

[14th January 2008] Supplement to Official Gazette | 1 aI t J

Pension business The business of effecting and carrying out of --

(a) contracts to manage pension fitnds or the investntent of- pensiontunds;

(b) contracts of the kind mentioned in paragraph (a) that are combinedlvith a contract ofinsurance coveritrg either conservation ofcapitalor paylncnl ofa min i t t iurn in tcrest : or

(c) contracts on a group basis to provide pensions during the l if-etime ofemployees as from their retirernent and to their dependants shouldthcy d ie in scnu icc or on pension.

Permanent health insurancebusiness

The business ol undertaking l iabil i ty under contracts to providespecified benefits against risks of persons beconting incapacitated inconsequence of sustaining injury as a result of an accident or of anaccident ofa specified class or ofsickness or infirmity, being contractsthat either are not expressed to be terminable by the insurer or areexpressed to be so tenninable only in special circutnstances Inentionedin the contract.

Linked long terrn insurancebusiness

The business of effecting and carrying out contracts of insurance underwhich the benefits are rvholly or partly to be determined by ref'erence tothe value of, or the income from, properly of any description, or byreference to fluctuations in, or in an index of, the value ofproperty ofanydescription.

Part IIGeneral insurance business

Policy

Accrdent andhealth policy

A contract in terms of which a person, in retum for a premium, undertakes toprovide policy benefits where -

(i) aninjuryevent;

(i i) ahealth event; or

(i i i) a death event,

contemplated in the contract as a risk, occurs; and includes a contract under whichthe policy benefits are -

(i) benefits otherthan a stated sum ofmoney;

(ii) to be provided upon a person having incurred, and having to defray,expenditure in respect ofany health service obtained as a result ofthehealth event concemed: and

(iii) to be provided to any provider of a health service in retum for theprovision of such service .

h,nglneenng pohcy A contract in terms of which a person, in return for a premium, undertakes toprovide policy benefits where an event contemplated in the contract as a riskrelating to -

(i) the possession, use or ownership of machinery or equipment, other thana motor vehicle required to be registcred under any other enactment, inthe carrying on of a business;

(ii) the crection of buildings or other structures or the underlaking of otheru'orks;

(i i i) the installation of machinery or cquiprnent; or

(iv) rnachinery breakdown or boiler pressure plants, occurs.

114 Supp lement to Offic ial G azette [4th January 2008]

Guarantec policy A contract in tenns of vvhich a person, other than a bank, in return flor a premium,r.rndertakes to provide policy benefits where an event conternplated in the policyas a risk relating to the lailure ofa person to discharge an obligation, occltrs.

I :ab i l i ty pol icy A contract in terms of which a person, in return for a premium, under-takes toprovide policy benefits where an event contemplated in the coniract as a riskrelating to the incurring ofa l iabil i ty, otherrvise than as part ofa policy relating toa risk more specifically contemplated in another definit ion in this section, occurs.

Nlotor policy A contract in terms of u'hich a person, in retum for a premium, undertakes toprovide policy benefits rvhere an event contemplated in the contract as a riskrelating to the possession, use or ownership of a motor vehicle required to beregistered under anv other written law occurs.

Property policy A contract in terms of which a person, in return for a premium, undertakes toprovide policy bene fits where an event contemplated in the contract as a risk otherthan a risk more specifically contemplated in another definition in this sectiorr,relating to the use, ownership, loss of or damage to movable or immovableproperty occurs.

Marine, Aviation,Inland Transitand Goods-in-transit policies

A contract in terms of which a person, in retum for a premium, undertakes toprovide policy benefits where an event contemplated in the contract as a riskrelating to the possession, use or ownership ofa vessel, aircraft or other craft orfor the conveyance of persons or goods by air, space, land or water, or to thestorage, treatment or handling ofgoods so conveyed or to be so conveyed, occurs.

Miscellaneouslolicy

A contract in terms of which a person, in return for a premium, undertakes toprovide policy benelits where an event contenplated in the contract as a risk,relating to any matter not otherwise defined in this section, occurs.

SECOND SCHEDULE

Exemptions and Concessions applicable to Non-DomesticInsurance Business

Section 122

Column ILaw-

Column 2Extent of exemption and non-applicability

l. Business Tax Act 1. The whole Acl

2. Immovable Properly(Transfer Restriction) Ac1

2. Section 4, in so far as it prohibits a non-Seychelloisfrom leasing immovable property in Seychelles orentering into an agreement to lease immovableDroDertv.

3. Social Security Act 3. Section 3(1Xb) in so far as it subjects a l icensed non-domestic insurer as an employer to pay contributionsto the Social Security Fund in respect ofits employees.

[14th January 2008] Srrpplemenl to Ofiicial Gazette 1 1 5

Stanrp DLrty Acl 'fhe lbliorving shall be exernpt i iorn the paymcnt of

starnp cluty: (a) all instrunrents cvidencing a transf-cr orother transactions in respcct of an ccluity interest ordebt obligation in rcspect of a l icensee; and (b) alltransfers ofotl ier propcfiy to or by a Iicensee, in so Iaras it does not consti iLlte transactions of property rvithinthe territory o1'Scyclielle s.

5. Trade Tax Act 5. All lurniture, stationery ancl equipment (includingcomputers and communicatiotrs ecy,ripment), for useby the l icensee in its Scychelles office solely fbr itsor.r 'n l icensed business purposcs, shall be exenrpt lronrpayment o1'any trades tax.

6. Goods and Services Tax Act 6. l -he wholcAct .

7. Immisration Decree 7 . A l icensee shall be cntit led to ernploy expatriateernployees conprising up to 50 percent of its totalnumber of employees; and there shallbe an exernptionfiom the requirenrent for payment of f-ees in respect ofgainfr-rl occupation permits in respect of expatriateemployees.

8. Exchange Contro l Act 8. Thc rvhole r\ct.

9. Foreign Earnings (Regulations) Act 9. ThewholeAct .

I certify that this is a correct copy of the Bill rvhich was passed by the National Assembly on2i st Decembe\2A?7 .

Marie-Nella AzeniaClerk of the National Assembly