Section 18: Designated fund

18. Designated fund (1) A long term insurer shall keep within its corresponding insurance fund set up under section 17, an appropriately designated fund in respect of each class of long term insurance business carried on, into which shall be paid— (a) all monies received by the insurer in respect of policies of that class which are issued by it or under which it has undertaken liability; (b) all income and gains arising from the investment of the assets of that designated fund. (2) An insurer shall, on issuing or undertaking liability under a long term insurance policy, determine the designated fund to which the policy relates and the policy shall, for the purposes of this Act, be deemed to be, and shall continue to be included in that designated fund until the determination is revoked with the approval of, or by, the Commission. (3) Assets of a designated fund established under subsection (1) shall be kept separate from the other assets of an insurer and shall not include— (a) an amount on account of goodwill; (b) an expenditure relating to capital; (c) such other asset as may be excluded under FSC Rules. (4) A long term insurer shall not— (a) transfer or otherwise apply assets representing a designated fund established under subsection (1) otherwise than in respect of claims and expenses relating to that business, except out of any established surplus in that fund; I15 – 19 [Issue 1] Insurance Act (b) transfer or otherwise apply assets representing any part of the designated fund maintained under subsection (1), otherwise than in respect of claims and expenses relating to that part of that business, except out of any established surplus in that part of that fund; (c) transfer any surplus in any designated fund or part of such fund to shareholders’ funds, except where all established deficits in any other designated fund have been met; (d) make any transfer from any designated fund to shareholders’ funds, except out of an established surplus; or (e) declare or distribute any dividend or bonus except where all established deficit on any designated fund or any part of such fund have been met. (5) Subject to subsection (4), where the actuary recommends after an actuarial investigation that the established surplus of a designated fund in respect of participating policies may be available for distribution, the insurer shall not transfer or otherwise apply assets representing any part of that surplus without allocating to the policy holders at least 90 per centum of that surplus or such other amount as the Commission may approve. 19. — [S. 19 repealed by s. 11 of Act 16 of 2007 w.e.f. 28 September 2007.]